Free money. Yes, you heard correctly, we said free money.
Sounds too good to be true, doesn’t it?
Today, we’re talking about grants. Receiving a grant is a lot like getting free money to start your business, but here’s the rub — they’re not easy to land.
Don’t let that deter you. If you like the idea of getting free money to start your business, then keep reading as we explain what you can do to improve your chances of getting a small business grant.
In this post we’re learning about who can qualify for a grant, how to prepare and apply for a grant, exploring the different factors that can increase your odds of successfully getting a grant, and sharing a list of small business grants worthy of consideration.
Small Business Grants
What is a small business grant?
We referred to grants as free money, here’s why: Unlike a traditional small business loan, you don’t have to pay back a grant. A grant doesn’t come with monthly payments and APRs — it’s money freely given to you for your business and startup costs.
Yet, that doesn’t mean you can use the funds however you’d like. Grants are awarded for specific purposes, so if you receive a grant to cover marketing and advertising costs, that money can’t be used toward payroll, products, your next vacation, or for anything other than it’s intended and stated purpose.
If you use grant money inappropriately you’ll likely have to pay it back, and what’s worse, you could face legal issues and be guilty of fraud.
The agency that awards the grant will provide instructions on accounting and reporting, and you must meet these guidelines and report on your progress and use of funds.
Who awards small business grants?
Grant money is awarded by various government-approved agencies (not the government itself), nonprofits, and even individual persons and businesses.
Money and grants can be found in the unlikeliest of places, so do your homework.
If you have an established relationship with vendors and banks then call them. Ask if they offer any grants and what the qualifications are. Most banks employ someone called a “Trust Officer,” a person in charge of the trust department. Their role is to manage the accounts for individuals involved in philanthropy and money-giving.
American Express’s Small Business Economic Impact Study found that two-thirds of every dollar spent at a small business ($0.67) stays within the local community. Most cities and towns have an economic development agency and it behooves them to promote small businesses and entrepreneurs so they’ll often have public funds available. If they don’t, call your governor’s office and ask about state-level agencies that offer grants.
These opportunities are unlikely to be advertised, so put yourself out there and ask around.
How do I qualify for a grant?
Well, that depends on the grant. Some grants are awarded only to female entrepreneurs, others to minority-owned businesses, whereas others are awarded based on industry. There’s a multitude of grants available with varying qualifications, so there are sure to be some you qualify for.
When an organization or business decides to create a grant, they will set aside the funds and determine the necessary qualifications and application process.
How do I apply for a grant?
After determining whether or not you qualify for a grant, you’ll want to apply. This process is known as grant writing.
Grant writing is notoriously detailed and requires diligence. In fact, many nonprofits seeking grants often hire out their grant writing to professional grant writers. If you can’t afford to do that, it’s okay, you can write an awesome grant proposal all on your own.
Tips for Grant Writing
Every grant appeal or application contains the following three elements:
- A need statement that is in line with the grant-making organization’s stated purpose for the grant.
- An explanation of how your small business or organization fits the grant-makers’ qualifications.
- Illustration of your need for the grant.
Increase your chances of landing a grant by using the following tips.
Don’t go rogue.
Every grant will offer different instructions on how to apply. Follow these instructions meticulously. If you can’t follow instructions on how to apply for the grant, why should someone take the time to entertain your request?
Don’t reinvent the wheel.
Instead of striking out on your own, look to previously funded grant applications. You can write to government funding agencies and request copies of these applications (the Freedom of Information Act, or FOIA, gives you access to these documents.)
As you read these funded grant applications, do you notice any common threads or information they all made sure to include? Make a note of it and include similar ideas in your application, just make sure they’re relevant to your small business.
Talk to others.
You are not the first person to seek a grant. Leverage the immense power of social media or your local chamber of commerce to connect with others who have received grants. Ask for their advice and listen to it.
Keep it focused.
Tailor your proposal to the specific grant you’re applying for, don’t use a carbon copy of an application you created for another grant. Writing a compelling proposal means you have to cater your message and appeal to the funder and their vision. How does your proposal align with the funder’s goals and intents? Acknowledge the funder and show your gratitude and appreciation for the opportunity they can provide. Make clear how your future success can be attributed to and enhanced by them. A personal appeal can go a long way in influencing someone’s willingness to award you a grant.
Before sitting down and writing, think about what you want to convey in your proposal. You can use your business plan as a starting point for inspiration. Create a framework and work to substantiate it.
Don’t be pretentious.
Your reader must understand what you’re saying in your grant proposal. You’re more than encouraged to use a thesaurus to add variety to your vocabulary but don’t choose big, cumbersome words in your proposal just because they look impressive. The goal is to use the right word to convey your thoughts, not lose your reader in a sea of jargon.
Make it clear.
Use short and to the point sentences. Don’t lose sight of the forest through the trees. Set up your main ideas and expound on them as needed, making the connections clear. Your proposal should seamlessly transition from one section to the next, not leave your reader wondering where on earth that last idea came from.
Make room for white space.
Use different sized headers and include space between major ideas or shifts in thought. Leaving white space on the page helps your reader understand the break between ideas and makes your proposal easier to read.
Make it memorable.
Use supporting details, graphs, and charts when necessary. And don’t underestimate the value of creating an emotional connection with your reader.
The person reading your proposal isn’t always the person who awards the grant. Oftentimes, the person reading your proposal will report back to the awarding organization’s board of trustees. They will present a condensed version of your proposal, boiling it down to the main ideas and the information that’s most important to the foundation. What information do you want them to share? Focus on supporting those ideas.
Appreciate the power of persuasion.
How do you persuade a reader to your cause? Grantsplus.com writes about three different “modes of persuasion”: Ethos, Logos, and Pathos.
- Ethos — this relates to ethics. Your writing should convey that you are credible and trustworthy. What credentials or qualifications do you have to support your trustworthiness?
- Logos — this relates to logic. You should support any claims you make in your appeal with data and facts. Do you have any customer testimonials you can include? Give your reader a reason to believe what you say.
- Pathos — this relates to the heart and appeals to emotion. Use your business story to further your appeal, making sure to illustrate your points with words that evoke imagery and quotes, if you have them.
Proofread and edit. Then do it again.
It’s 4 o’clock in the morning and you’ve stayed up all night and finished writing your appeal, which means it’s time to submit it, right? Absolutely not!
Don’t even think about submitting your grant application if you haven’t proofread and edited it. Read it out loud so you can hear any mistakes in grammar or spelling and fix them accordingly. After you’ve done that, take it a step further and ask someone else to review your grant application. Sometimes, an impartial set of eyes can find issues that you’re otherwise blind to.
Small Business Grants available in 2020.
Now that you know what a small business grant is, how to qualify, and how to write an appeal for a grant, it’s time to explore the small business grants available to you. The following list is by no means exhaustive — there exist grants for almost every niche and industry, but these resources can help jumpstart your search for the perfect grant. Keep in mind that the government itself doesn’t provide money to your business, but it does partner with numerous agencies that can help you seek grant funding.
Here, you’ll find information on grants administered by government agencies. You can search through a wide variety of grants and filter your search and results. To access the full eligibility details of the grants listed, you’ll need to register an account with grants.gov.
This site doesn’t just help you find a grant, it offers resources and guidance for both applicants and grantors. If you’re on-the-go and can’t sit down to peruse their site on your computer, download their app.
Got a great idea? Check out this site to determine if it could be of use to the government. At Challenge.gov, “members of the public compete to help the U.S. government solve problems big and small. [They can] browse through challenges and submit [their] ideas for a chance to win.”
Most of the challenges offer a cash prize, so go ahead and take a gander to see if your small business or idea solves any of the problems listed there.
This agency is dedicated to assisting minority-owned businesses find the grants and resources they need. It’s managed by the U.S. Department of Commerce.
The NMSDC “advances business opportunities for certified minority business enterprises and connects them to corporate members.” You can receive capital loans through the NMSDC and grant funding through the Business Consortium Fund, which is a network of suppliers and vendors that work with the NMSDC.
Verizon recognized early on that the Coronavirus pandemic would greatly affect small businesses. They developed this fund to provide, “…grants of up to $10,000 to small businesses, particularly in historically underserved communities hit hard by the pandemic.”
These programs are “highly competitive [and] encourage domestic small businesses to engage in Federal Research/Research and Development with the potential for commercialization.”
4.0 is an organization that “invests coaching, community, curriculum, and cash in promising leaders to test tomorrow’s learning models with students and families in their local communities.” You can apply for a fellowship on their site.
The SBA offers various grants and cooperative agreements to help fund your small business. Just as with every grant, there are specific requirements to apply, so check out their site for more information on specific grants and eligibility standards.
GrantWatch is a great site to use to locate your next funding opportunity. They list grants available in both local and international communities. They currently have over 25,000 grants listed on their site for your perusal.
If you didn’t find the right grant or solution for your needs in that list, here are a couple of things you can do:
- Google it.
- There’s a vast amount of information online. Use search engines to find the right grant for you.
- Consider other forms of funding.
Apply for your grant and put it to work
We hope you found this guide to small business grants helpful.
If you have any grant-seeking suggestions for other small business owners and entrepreneurs, share them in the comments below! We’d love to hear from folks who have sought grants to learn what has and hasn’t worked for them.
Have you received a grant and are you ready to take your business to the next step? If so, don’t forget about your business’s digital presence.
Today, more than ever, having a digital presence for your business is essential. Start by claiming your domain name and then building a website where your customers and clients can interact and transact with you. You can start today at Domain.com.