Getting Small Business Grants
Getting small business grants can be competitive, but a persistent entrepreneur with a good idea will find the financing they need. As the economy has tightened and budgets decreased, there are very few avenues towards capital to start up a new business that do not involve loans and paying interest. This makes the path towards financial independence all but impossible for many working Americans.
However, the small business grant is still available (even in these very lean times!) as a potential source of funding for you dream of self-employment. A small business grant such as an SBIR grant is part of a program funded by the federal government which provides capital for start up businesses. Sometimes a small business grant will simply give the money to a recipient with no requirement of repayment. Other business grants will require you to repay them with a minimal amount of interest over a period of years. Whether or not a small business grant requires repayment will depend on the nature of the grant itself. Obtaining a small business grant is certainly no simple matter. In truth, over a million applications are received every year with only hundreds being awarded. However, the fact that only a few hundred are awarded does not necessarily mean that the others were turned down for lack of funding.There are specialized grant programs for minorities, new businesses, and women owned businesses.
Quite the opposite, it is very common for a small business grant to be turned down due to filing mistakes as opposed to lack of funds. In fact, it is a common occurrence for funds to be returned at the end of the year because not enough people qualified for the grants available. But, the government is not the only potential source of a small business grant. Businesses will frequently form a “private foundation” which is responsible for disbursing funds set aside for grants and other useful community needs.
The incentive for a company to use a private foundation is simple: tax savings. A company will pay less in corporate taxes when it gives away a small business grant than if it merely reported the income. Therefore, the private business community is an excellent grant source and is expected to be so in the future unless the tax code is significantly altered.++The best way to ensure that your small business grant is approved is to be organized and very thorough in filling out the application.
A winning small business grant will generally include a business plan that includes a detailed explanation of what funds are needed and why. But the most important thing to remember is to fill out the application thoroughly and exactly as directed. Attention to detail is what will separate the winners of a small business grant from the losers. Make sure to read and re-read the instructions. Look at previous successful grants with a particular agency and learn from how they structured their proposal. Don’t cut corners because you don’t know what to write. Your successful competitors will know, and you can level the playing field by retaining a grant writing specialist who can deal with your content area, but who also has the experience to get a solid application done for the specific grant mechanism you want to get.