Starting a business is expensive. You have to test new products, secure inventory, research market trends, etc. There’s no shortage of costs for a startup business. But if you haven’t even started selling yet, where does the money come from? Don't make the mistake of falling behind by taking out a business loan without any revenue.
Seasoned small business owners might have a network of financiers, but for entrepreneur rookies, securing funding before you’ve had a chance to prove yourself can be tricky.
Every new business can do with a bit more cash, but the application process for small business grants involves more than putting your name on a list and waiting for a deposit. Not every grant is right for every business and understanding how grant-issuing organizations evaluate applicants is imperative to securing the financial assistance you need.
If you plan on investing the time and energy into applying to a small business grant program, it’s important to understand the options available and pick the grant that’s right for your business.
Small business grants are offered by all kinds of organizations, to all types of businesses, with a wide range of values, missions, and functions.
There’s no single set of criteria that can be applied to all grant opportunities, but generally, grant-lenders are looking for small businesses that embody their organization’s stated purpose and add value to a particular community or industry.
Small business grants are not loans, so lenders aren’t expecting to be paid back. They’re not investment capital, either so issuers aren’t expecting to own assets of your business. But that doesn’t mean that small business grants don’t come with expectations and incentives. Issuers still expect a return on their investment, just not a monetary one. Instead, organizations that provide small business owners with grants want to feel confident that your business idea contributes to their organization’s mission—whether it be a common good, innovation in a particular industry, or economic growth in a specific community.
A small business grant isn’t necessarily “free money” either. Grant issuers often have stipulations about how the money can be spent, sometimes even spending the money themselves on specific resources they believe will help your business grow.
If you’re starting out as a small business owner and looking to apply for small business grants for your startup, here are some key points to keep in mind: