How to get a small business grant: A step-by-step guide
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As a small business owner, you might struggle to secure funding, assuming that grants are either too hard to get or highly competitive. Without proper funding, your business can stall its growth, and you may miss expansion opportunities.
This guide will give you a step-by-step roadmap to help you find and apply for the best grants available. Whether you’re scaling your business or just starting off, these steps will help you increase your chances of securing funding.
What is a small business grant?
A small business grant is a sum of money awarded to businesses to support their growth, innovation, or specific projects. Unlike loans, grants do not need to be repaid. They can come from government agencies, private organizations, nonprofits, and corporations.
However, grants often have strict eligibility requirements and are usually awarded for specific purposes, such as research, community development, or minority-owned businesses. This means not all businesses will qualify, and the application process can be highly competitive.
Grants vs loans: What’s the difference?
Many business owners compare grants and loans to determine which option is best. The main difference is that loans must be repaid with interest, while grants for small businesses provide free funding—if you meet the requirements.
Here’s how grants and loans compare:
| Feature | Grants | Loans |
| Repayment | Not required | Required with interest |
| Availability | Limited and competitive | More widely available |
| Eligibility | Often strict, based on specific criteria | Based on creditworthiness and ability to repay |
| Purpose | Typically restricted to specific projects or industries | Can be used for a wide range of business expenses |
While grants are appealing, they aren’t always easy to get. If your business doesn’t qualify for a grant, a loan might be a more practical funding option.
Types of small business grants available
While all grants offer free funding, they come in different forms, each with specific focuses and eligibility requirements. Below are some of the common types of small business grants available:
Federal small business grants
Federal grants are financial awards from the federal government or federal agencies. Eligible recipients of these grants include government organizations, non-profits, schools, and businesses. These grants support activities that provide significant benefits to the public, such as research, education, innovation, infrastructure, and community development.
Examples:
- Small Business Administration (SBA) grants
- Small Business Innovation Research (SBIR)
- Small Business Technology Transfer (STTR) grants
- USDA Rural Business Development grants
Remember, federal grants often require rigorous application and detailed grant proposals should you opt to choose this.
State and local small business grants
State and local governments offer grants as financial awards to organizations within their jurisdiction. Grants tailored for different activities that highly benefit the state or locality, including community and economic development, arts, culture, education, and health, are offered by state and local governments.
Examples:
- Texas Workforce Commission Small Business Grants
- New York Minority and Women-Owned Business Enterprise (MWBE) Grants
Before applying for state and local grants, contact your state and local government agencies to check for specific opportunities.
Corporate and private small business grants
Large corporations and private foundations offer corporate small business grants to support small businesses that align with their missions and philanthropic goals. These grants can come from different industries and may focus on business types or community initiatives.
Examples:
- FedEx Small Business Grant
- The Visa Everywhere Initiative
- Nav’s Small Business Grant
If you choose this type of grant, research corporations and foundations who are active in your industry.
Industry-specific and demographic-based grants
If you want a grant that caters to specific industries or supports underrepresented business owners, such as women, minorities, and veterans, then this type is for you. These grants aim to address disparities and foster inclusive entrepreneurship.
Examples:
- The Cartier Women’s Initiative (for women-owned businesses)
- Amazon’s Black Business Accelerator (for Black-owned businesses)
- Google for Startups Black Founders Fund (for Black-owned tech businesses)
Step-by-step guide on how to get a small business grant
Now that you understand the different types of available small business funding options, let’s explore the step-by-step guide on how to get one. As a business owner, securing a small business grant requires careful preparation, planning, and execution.
Below is a simple checklist you can use to track your application process:
Step 1. Find grants
Research available grants from government agencies, nonprofit organizations, and private companies. Use resources like Grants.gov, SBA.gov, and local business development centers to find opportunities that match your business needs.
Step 2. Check eligibility
Carefully review the grant requirements to ensure your business qualifies. Grants often have specific criteria, such as industry, location, business size, or minority-owned status.
Step 3. Write a business plan
Many grant applications require a solid business plan outlining your mission, goals, target market, financial projections, and how the grant funds will be used. A well-structured plan can strengthen your application.
Step 4. Customize your application
Tailor each grant application to fit the specific requirements and objectives of the grant provider. Avoid using generic responses, and highlight how your business aligns with their mission and funding priorities.
Step 5. Gather documents
Prepare required documents such as tax returns, financial statements, proof of business registration, and any other paperwork requested in the application. Having everything organized will speed up the process.
Step 6. Review and proofread
Carefully check your application for errors, missing information, or unclear responses. A polished, professional application increases your chances of approval.
Step 7. Submit on time
Pay close attention to deadlines and submit your application well before the cutoff date to avoid last-minute issues. Some grants may require online submissions, while others need mailed-in paperwork.
Step 8. Follow up
After submitting your application, check the status periodically. If possible, reach out to the grant provider to confirm receipt and inquire about next steps. If you’re rejected, ask for feedback to improve future applications.
Best practices for increasing your grant approval chances
After submitting your small grant application, your next step is to explore different practices that will increase your chances of getting grant approval. Here are some ways you can maximize your chances:
Define your objectives
Grant reviewers prioritize applications that clearly articulate how the small business grant funding will benefit their business and community. Unclear objectives weaken your proposal, so define your goals precisely and explain thoroughly how you will achieve them.
When crafting your proposal, include specific, measurable, achievable, relevant, and time-bound (SMART) goals to demonstrate a clear plan for using the funds effectively and achieving tangible results.
Example:
“Purchase new equipment to increase production capacity by 20%, allowing us to fulfill larger orders and hire two additional employees.”
Check and prepare your requirements and documents
Many grant applications fail due to easily avoidable mistakes. One of the most common culprits is missing documentation, so, always double-check your application to check if they’re complete.
Failing to meet the eligibility criteria disqualifies your application, so carefully review all requirements before applying. Proofread your application and proposal to remove any grammatical or typo errors that could detract from its professionalism.
Build your network
Building relationships within your industry and community can significantly strengthen your grant application. Collaborating with established industry organizations or local economic development programs demonstrates community engagement and can provide valuable support. These affiliations can enhance your project’s credibility and increase your application’s competitiveness. Seek out mentors and advisors who have experience with grant writing.
Alternative funding options if you don’t qualify for a grant
Securing grant funding is competitive. If you don’t qualify for a small business grant, you can explore other alternative funding options:
Business loans
Consider traditional bank loans or SBA loan programs, which often offer more favorable terms for small businesses. Research different loan options, compare interest rates, and review repayment terms.
Crowdfunding
Use crowdfunding platforms like Kickstarter or GoFundMe to raise capital from individuals on the internet. Craft a compelling crowdfunding campaign that showcases your project and offers rewards to backers.
Angel investors and venture capitalists
Seek out angel investors or venture capitalists who invest in early-stage businesses. Prepare a strong pitch deck and business plan to attract potential investors. Be ready to offer equity in exchange for funding.
Take the first step toward securing your grant
Grants can be an integral part of your business’s growth and success, helping you secure the financial support you need to move forward. Now that you understand how to get a small business grant, it’s time to take action.
Your next big step is growing your business’ online presence. At Domain.com, we provide resources and tools you need, from domain registration and professional email to website building and hosting.
Once you’ve secured your grant, use it to create a strong online platform that helps you expand and maintain your competitiveness in the online marketplace.
How to get a small business grant FAQ
The frequency of grant applications depends entirely on the specific grant program. Businesses can apply for some grants once a year, while others have rolling deadlines and accept applications all year round. To comprehend the application timeline, carefully read the grant guidelines.
Yes, grant money is typically regarded by the IRS as taxable income. To learn the tax ramifications of getting a grant and how to appropriately declare it on your tax return, speak with a knowledgeable tax expert. Because tax regulations can be complicated, expert advice is crucial.
When compared to federal grants, state, local, and private company grants frequently have quicker processing timelines. This is because they usually entail less bureaucratic control and smaller financial amounts. The grant provider may still have an impact on processing speed, though.
Of course! Your chances of receiving funds are greatly increased when you apply for several awards at once. Customizing each application to the unique needs of the grant program is essential, though. Avoid sending the same generic application to several different providers. Customizing your submission shows that you genuinely care about and comprehend the goals of each award.
