Business Startup Grants – Advertiser Disclosure: Our unbiased reviews and content are partially supported by affiliate partnerships, and we adhere to strict guidelines to maintain editorial integrity.
Startups are inherently risky endeavors. According to Fortune magazine, nearly 60% of new startups fail. Because new businesses are so risky, getting startup financing is extremely difficult — most banks won’t lend to you unless you’ve been in business for at least two years. Some online lenders offer startup loans, while startup grants are another option for new business financing. Startup grants are more difficult to get than startup loans, but grants are more desirable because you don’t have to pay the money back.
Business Startup Grants
Want a shot at a startup grant? Follow these steps to find business grants you may qualify for.
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Generally, only certain types of businesses qualify for startup grants. If your biz doesn’t fall into one of these categories, you’re unlikely to qualify. For example, while grant money might be worth it to an innovative hardware manufacturer, when it comes to a run-of-the-mill hardware store…eh, not so much. Then again, if you’re facing significant obstacles to being a woman-owned hardware store, there’s a good chance that a private or public organization will want to give you some free money to set up shop in an economically distressed area.
To determine if your business is one of the industries most likely to qualify for startup grant funding. If not, you can consider other alternative financing options like crowdfunding.
City and township governments, business associations, and nonprofits in your immediate area are good places to look for grants. Even if you determine that your business does not fit into the “grant-eligible” categories I mentioned above, you may be eligible for a grant if you are starting a business in a certain city or region. For example, the Arc Grants organization provides grants to new businesses in the St. Louis area. There aren’t too many of these grants, but it’s always worth checking.
Be sure to scan city, county and state websites for grant opportunities as well as your local chamber of commerce. If you’re looking to relocate, you can also check out local business grant opportunities in the city you’re planning to move to.
Small Business Grants
If you can’t find any grant opportunities for businesses in your area, you can search for grants by niche; That is, depending on your specific industry or type of business. Your startup can fall into many niches — for example, your business can also be a veteran-owned and clean-energy business. Simply searching for phrases like “business grants for green construction” or “grant for home daycare” can yield results specific to your particular business.
Sometimes the grant is also for a specific niche and a specific region. Two examples of specific business grants include the Halsted grant for new silversmiths living anywhere in the US and the Green Technology Business Grant Program for green technology startups in Cleveland, Ohio.
Many large corporations offer business grants or host some type of small business competition where the best businesses can win free money. These grant programs are highly publicized and thus highly competitive, but may be worth a look. FedEx, Miller Lite and Visa are some of the corporations that offer business grants; Miller Lite’s grant competition is specifically for startups.
Some companies that provide small business services also host grant contests. For example, AWeber, a popular email service provider aimed at small businesses and nonprofits, is currently hosting a Small Business Big Impact Award $20,000 grant contest available to U.S.-based small businesses and nonprofits with 50 or fewer employees.
Small Business Startup Financing Strategies
Some popular business lenders also offer business grant awards. Veteran-owned businesses should, for example, look to StreetShares’ annual business competition for veterans.
Small businesses can find potential grants at Grants.gov, a one-stop-shop for government grants. However, you should know that most of these are medical research grants. Also, even if you qualify for one of these valuable federal grants, you may be competing with nonprofits and even city and state governments. The reason I list federal grants last is because few, if any, federal grants will be eligible for certain startup businesses.
However, at least two federal grants are for innovative small businesses, and these are the Small Business Innovation Research (SBIR) grants for high-tech businesses involved in scientific research and development. InnovateHER grants competition for businesses that benefit women and children.
This blog post on the SBA website explains a little more about US government grants and how many are not really intended for for-profit businesses. If you need some government help to fund your small business, you can look into Small Business Administration (SBA) loans. These loans are low-interest and relatively easy to apply for if you use an online SBA lender like SmartBiz.
How To Use Grant Money To Fund Your Startup
Once you’ve found the list of startup grants you’re eligible for, the next step is to start creating your grant application package. The application process is slightly different for each type of grant, but usually you’ll need to submit a business plan and a request for proposal (RFP). For larger grants, you may also want to consider hiring a professional grant writer, although this may not be possible or necessary for a grant competition where you only stand to win $2,000-$5,000, beating out thousands of other applicants.
The last thing I recommend to anyone looking for a startup grant is to review startup grant options, such as small business loans or alternative business financing options such as P2P loans or equipment financing. If you have any questions about startup loans or alternative business financing, email us or ask in the comments!
The former editor-in-chief of SteelOrbis, Shannon has been researching and writing on small business software and financing since 2015. Her purchasing and retail expertise has been cited in numerous publications, including Reader’s Digest, MSN, Yahoo Finance and GOBankingRates. She has also published articles for LIVESTRONG.COM, eHow, Life’d and other websites. Shannon attended San Diego State University, graduating in 2005 with a BA in English.
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Startup Business Grants: Best Options And Alternative Funding Sources
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Start Up Government Grants In Singapore (and How To Apply)
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