Whats A Government Small Business Loan
Government-backed small business loans are more widely available than grants. The government doesnt provide the money it offers lenders a guarantee on the money they lend you. This makes it less risky for banks to lend you the funds you need.
Similar to a grant, government-backed small business loans are aimed at businesses like startups that might not be able to get funding from traditional lenders.
Unlike a grant, government small business loans do need to be repaid. But the interest rates are usually better than a traditional lenders. And additional business support may be available in the form of mentoring and training.
Who Should Apply And How To Do It
Money to start your businesscould anything be better? Thats what a grant could do for your startup. And while small business owners may dream of receiving grants to fund their startup, they may not be as plentiful or easy to get as you may think. However, if you know where to look and how to apply, you might be successful in securing free money for your business.
Before you invest any time and energy in finding and applying for a small business grant for your startup, its important to understand what criteria these grants look for, and decide whether or not your particular business or industry qualifies.
Federal State Marketing Improvement Program
This matching grant program, also known as FSMIP, provides matching funds to State Departments of Agriculture and other appropriate State agencies to assist in exploring new market opportunities for food and agricultural products, and to encourage research and innovation aimed at improving the efficiency and performance of the marketing system.
Read Also: Interest Rates On Car Loans
Beginning Farmers And Ranchers
USDA, through the Farm Service Agency, provides direct and guaranteed loans to beginning farmers and ranchers who are unable to obtain financing from commercial credit sources. Each fiscal year, the Agency targets a portion of its direct and guaranteed farm ownership and operating loan funds to beginning farmers and ranchers.
Small Business Development Centers
In addition to its small business loan programs, the SBA also provides training and counseling to small business ownersfelons includedthrough its Small Business Development Centers .
You can search online for an SBDC in your area. Programs are available to established small business owners and budding entrepreneurs alike. An SBDC can provide guidance in areas such as business development, access to business capital and business financial management.
You May Like: Sallie Mae Student Loan Forgiveness
Consider Who Will Review The Application
When youre applying for any type of grant, its important to consider who will be reviewing your application and what they want to see. A reviewer will not have any existing information about your business or business idea. So, be sure to provide clear details about your company, including how you could use the grant award to propel your business forward.
Department Of Defense Grants
Good for: Research and development companies
The DoD offers grants to small businesses through the STTR program and a number of other initiatives, like the Defense Enterprise Science Initiative. The Office of Naval Research, the Air Force Office, and the U.S. Army Research Institute are all looking for research and development of technology that will help them reach their goals.
Read Also: Can You Add Onto An Existing Loan
Local Chamber Of Commerce
It’s not just the federal government that offers grants to small businesses your state and local governments may also offer funding opportunities. Your local chamber of commerce can also help you find potential grants from local businesses and even local colleges.
More Info:Chamber of Commerce Directory
State Small Business Grants
State Business Incentives Database
The State Business Incentives Database can be a valuable database for business owners. It has a map feature that allows you to select your state and see the number of grants available and find information on tax credits and exemptions. However, it requires a login that is only available to members of the Council for Community and Economic Research . A basic membership, which includes access to the database, costs $362 per year.
U.S Economic Development Administration
Part of the U.S. Department of Commerce, the EDA can be an excellent resource for small businesses looking for state grants. The EDA collaborates with communities and regions to drive economic development across the country. It does so by offering grants and working directly with communities so they can encourage innovation and entrepreneurship.
Small Business Development Centers
All of the research and work that go into applying for any business grant can be daunting, but the SBDC might be able to help. There are nearly 1,000 development centers across the country where business owners can seek free consulting and training on various topics, including cybersecurity and digital advertising. SBDC consultants can help you find and apply for the right grants for your business.
You May Like: How To Reduce School Loan Debt
Free Money From The Government
The federal government does not offer grants or free money to individuals to start a business or cover personal expenses, contrary to what you might see online or in the media. Websites or other publications claiming to offer “free money from the government” are often scams. Report them to the Federal Trade Commission.
Small Business Technology Transfer Program
Good for: Energy-focused businesses
The STTR program aims to expand funding for innovative research and development leveraging existing technology. What makes this program unique from the SBIR program is that small businesses get the opportunity to formally collaborate with research institutions throughout the program. Each agency sets its own guidelines check here for open STTR grants.
You May Like: Which Loan Options Are Best For First Time Home Buyers
First Nations Development Institute Grants
Since 1993, First Nations has been offering grants to help support Native American organizations and projects, totaling $51.6 million in grants, along with technical resources.
Past grant opportunities include programs for Covid-19 response, native youth and culture support, college scholarships and a native youth business plan competition, among others. Visit the First Nations website to learn more about new grant opportunities when they become available.
Apply For A Grant For An Organisation
We make support grants to organisations from nearly 300 funds set up to benefit causes in Tyne & Wear and Northumberland, and across North East England. No two funds are the same, so we match eligible applications to each funds interests.
Please check your organisation is eligible to apply. If you are, you can make a general application or answer a call for applications. Our help notes cover all our questions and explain the information we need. Please read the notes before starting an application.
We do not fund applications:
- for activities which are not charitable in law
- from organisations that do not have adequate safeguarding arrangements
- for contributions to general appeals or circulars
- where the primary benefit is the advancement of religion
- where the primary benefit is to enable a public body to carry out its statutory obligations
- where the primary benefit is the advancement of animal welfare
- for activities which have already taken place
- for grant-making, or equivalent gifts in kind, by other organisations
- from privately owned and profit-distributing companies or limited partnerships.
- adequate safeguarding arrangements
Some of our funds have more specific requirements for the size and type of organisations. In those cases, we will have a call for applications stating the extra criteria you must meet.
We support a wide range of causes, although our trustees sometimes prioritise certain places and issues. You can apply for funding towards:
You May Like: Credit Score Requirements For Va Loan
Make Sure Your Business Aligns With The Organizations Mission
Organizations that provide small business grants do so in the hopes of achieving a specific goal they care deeply about. Ask yourself how your business model helps contribute to achieving this goal. If the answer is hard to parse, you might want to consider applying for grants with another organization.
Government Sources For Small Business Grants
There is a wide variety of government grants from both the federal and local governments.
- Grants.gov: The first place all small businesses should go is to look for a federal grant. Its a database of thousands of grants with powerful filters that will help you quickly narrow down the results to those you have a good chance of winning.
- Small Business Administration Grants: The SBA mainly helps small businesses find conventional means of funding, such as loans. But they also have a few grant programs targeted specifically at companies involved with research or exporting.
Here are the primary government-sponsored grants:
Also Check: How Long Does Va Loan Pre Approval Take
The Coalition To Back Black Businesses
The Coalition to Back Black Businesses is a partnership of several brands that have come together with the goal of empowering Black-owned businesses.
The Coalition is supplying $14 million in minority grants, resources and training over a span of four years through 2023 that is meant to help small businesses recover from pandemic-related setbacks. The Coalition includes American Express, ADP, AIG Foundation, Altice USA, Dow and the S& P Global Foundation.
Select businesses will qualify for grants in the amount of $5,000 each fall, in combination with training and mentorship benefits. When the summer arrives, a few initial grant recipients will receive additional $25,000 enhancement grants as a means of additional funding and support.
Eligible businesses must be Black-owned enterprises located in economically distressed communities. You can apply on the Coalitions website in the fall when the application process opens. The grant committee will select 400 or more eligible applicants at random to receive cash awards and other benefits.
How To Qualify For A Small Business Grant
Eligibility requirements vary based on the type of grant youre applying for. A grantor may require that your business operates in a specific industry, fits its definition of a small business and meets a minimum annual revenue threshold.
Before you apply for a small business grant, review the requirements carefully to ensure you have the best chances of qualifying.
Recommended Reading: How To Take Loan Against House
Specialty Small Business Grants
Some organizations set aside funds for certain groups of business owners who face unique challenges, including minorities, veterans and women.
- Black Founder Startup Grant: SoGal Foundation, along with its partners, offer several cash grants that range from $5,000 to $10,000 to Black women and nonbinary entrepreneurs. To qualify, you must have a legally registered business, identify as a Black woman or Black nonbinary person and plan to seek investor funding to scale.
- The Veteran Small Business Award: The Street Shares Foundation hosts a pitch contest each year for veteran-owned businesses that have a social impact on the military community. If you qualify, you must create a pitch video and submit an online application. Applications are closed for 2021.
- The Amber Grant Foundation: The Amber Grant foundation awards $14,000 each month and $25,000 in December to women-owned businesses. While applying for this small business grant is easyyou only have to fill out a short formthe application fee is $15.
Quick Tips For Getting More Grants
There are a lot of simple things you can do to improve your chances of winning grants. Most are easy to understand, but you need to make sure you keep them in mind.
Learn all about other useful ways to finance your business with our Small Business Financing Guide.
Heres how to get more grants:
- Always look for new grant options. Setting up a Google Alert is a good idea.
- Make sure the time spent to apply is actually worth the award.
- Read over the specific individual application instructions for each grant. Some are similar, but few are exactly the same.
- Double-check that you are eligible before spending a lot of time on an application.
- Provide specific numbers on how the grant will be used and how it will help.
- Double-check your spelling and grammar.
- If you can, submit your application early you may look more prepared than those who apply late.
- Back up claims with credible citations.
- Be realistic when mentioning your companys costs and revenue.
- Find a book from your library on grant writing if you want to write better proposals.
Recommended Reading: How To Refinance Your Car Loan With Capital One
Grants Loans And Programs To Benefit Your Small Business
When you know where to look, help for your small business is there for the taking.
There are many grant programs available to small businesses, depending on a variety of qualifying factors.
Times are tough for small business, but help is available, from both the governmentfederal, state or localand the private sector. It may be in the form of a grant, a loan or a leg up competing in a difficult business environment. Heres a breakdown to help you sort through whats available.
Best Small Business And Start
Grants and loans can provide vital funding for start-ups and small businesses in the UK. However, many entrepreneurs delay the application process or dont realise theyre eligible for financial support. But registering can take as little as two minutes, so its worth knowing your options. If youre looking to raise funding, here are the best finance opportunities on offer in the UK to help grow your business.
Also Check: Can I Pay My Loan Off Early
Small Business Innovation Research Program
Good for: Technology companies
The federal research SBIR grant program is for entrepreneurs focused on innovations in technology that have the potential for commercialization. You can check its funding opportunities here. Focus areas from the past include clean and safe water, homeland security, land revitalization, green construction, advancement of health care, and more.
Us Small Business Administration Microloans
SBA loans can be an affordable way to find funding for your small business. However, the loans have a reputation for strict eligibility requirements, and for being tedious and slow.
If you are considering this type of small business funding, SBA Microloans may represent one of your best choices. The program offers qualified borrowers loans of up to $50,000 through SBA-approved lenders.
The SBA doesnt disclose any eligibility restrictions pertaining to felony records with SBA Microloans. However, you should be prepared to provide collateral and a personal guarantee.
You May Like: Apply For Small Loan Online
Street Shares Foundation Veteran Small Business Award
Veteran business owners may be interested in applying for a grant through the nonprofit Street Shares Foundation. The organizations grant program, the Veteran Small Business Award, provides three different grants through its Military Entrepreneur Challenge:
- First place: $15,000
- Second place: $6,000
- Third place: $4,000
On top of the cash awards, the first-place recipient gets to take advantage of $25,000 worth of pro-bono legal service. Each finalist also receives a $1,000 scholarship to the Synergy Learning Institute. First, second and third place winners receive bigger scholarships ranging from $3,000 to $10,000.
Make Sure Youre Eligible
Grant applications can be tedious and time-consuming. So, its important to avoid wasting your limited time applying for cash awards that youre not eligible to receive.
Before you fill out any grant applications for veterans, review all of the eligibility requirements. Even among grants for veterans, some may be limited to disabled vets, those with honorable discharges, veterans opening new startups and more.
You May Like: No Interest Student Loans Until After Graduation
Usda Rural Business Development Grants
The USDA Rural Business Development Grant is another federal resource that provides small rural businesses with funding, technical assistance and training. While there is no maximum grant amount, $10,000 to $500,000 is the standard RBDG award range.
To be eligible for this USDA grant, you must own a small rural business that earns less than $1 million per year and has 50 new workers or less. If you believe your business may be eligible for funding, you can visit the USDA website for information on how to speak with a Business Program Specialist in your state. The specialist can give you guidance regarding the forms and applications you will need to complete.
Assistance For Small Businesses
The COVID-19 public health crisis and resulting economic crisis have created a variety of challenges for small, micro, and solo businesses in communities across the country. The Treasury Department is providing critical assistance to small businesses across the country, facilitating the urgent deployment of capital and support to help these organizations not just persevere, but recover on solid footing.
Don’t Miss: Can I Get Conventional Loan With 5 Down
Are There Any Downsides To Business Grants
A variety of factors make many business owners skeptical of the free money that business grants offer. While every grant has a different application period, rules, terms, and conditions, here are some potential downsides you should keep in mind when applying.
As mentioned above, business grant funds are taxable income for IRS purposes. The funds will still be free money for your business, but you will need to make sure you dont spend the entire payout without planning for the added income in your tax bill.
Business grant applications take time. Youre already a time-crunched business owner wearing a million hats, do you really have time to apply for every business grant opportunity you come across? Its a valid complaint about business grants. The likelihood of winning the grant can be small depending on the size of the contest, so you have to make your own cost/benefit analysis to figure out if your most precious asset time is worth it.
Small business grants may require campaigning. Many business grants require a social media component, where you campaign or share something publicly about your grant application. Thats not necessarily a negative if you have an active and vocal social media following, but campaigning does take additional time and some business owners may understandably not want to be as public about their search for money.