Small Business Grants: How to Secure Financing for your Startup

Starting a new business isn’t cheap.

测试new products, researching market trends, securing inventory⁠—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?

Seasoned business owners might have a network of financiers, but for up-and-coming entrepreneurs, 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 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 crucial to securing the financial assistance you need.

If you plan on investing the time and energy into applying to a grant program, it’s important to understand the options available and pick the grant that’s right for your business.

How do I get grants to start a business?

Small business grants are offered by all kinds of organizations, to alltypes 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 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 areturnon their investment, just not a monetary one. Instead, organizations that provide small businesses 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 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’restarting a businessand looking to apply for small business grants for your startup, here are some key points to keep in mind:

Look for grants within your industry

A lot of small business grants are industry specific, so it can help narrow down your search if you focus on organizations and research institutions within your particular industry. Focusing on one industry also builds buzz around your business, and can help build connections with industry figures who may be able to offer guidance and investment opportunities.

Read the eligibility requirements carefully

It sounds obvious, but it’s not hard to overlook aspects of the eligibility requirements and end up putting a ton of effort into applying for a grant you’re ineligible for. Read the requirements carefully and evaluate whether you qualify for the grant. If you’re unsure whether you qualify, contact someone from the organization and ask.

Make sure your business aligns with the organization’s mission

Organizations that provide small business grants do so in the hopes of achieving a specific goal they care deeply about. Ask yourself how yourbusiness modelhelps contribute to achieving this goal. If the answer is hard to parse, you might want to consider applying for grants with another organization.

Know what you’ll be spending the grant money on

Some organizations may stipulate what grant money will be spent on, but even when they don’t, it’s still important to have an idea of how you plan on using the money. When an organization is determining whether to issue your business a grant, having abusiness planand knowing how the money will be spent will help them understand more clearly how your business aligns with their mission.

Focus your pitch on innovation and expansion

Organizations that issue small business grants typically favor business that they see as innovative, forward thinking, and on a path to growth. Focus your pitch on how you plan to scale, any new technologies you might be developing, and what your business can do to help the organization with its mission.

General business grants

SBA grants

The USSmall Business Administration (SBA)is a federal government agency that provides support for small businesses with the goal of strengthening the nation’s economy. The SBA offers a wide variety ofloans, grants, and other funding programs:

• TheCOVID-19 Economic Injury Disaster Loan (EIDL)offers relief for businesses that have been affected by the pandemic⁠, such as restaurants, concert venues, and other businesses.

Learn more:Government Relief Programs for Small Businesses Affected by COVID-19

• TheState Trade Expansion Program (STEP)offers federal grants throughout the US meant to assist businesses in expanding globally, offering funds for foreign-market trade shows and expansion opportunities.
• The SBA offers a number ofveteran assistance programsthat provide funding for veteran-owned businesses.
• TheWomen-Owned Small Business Federal Contracting Programoffers funds specifically to women-owned businesses, with the goal of leveling the playing field for women entrepreneurs.
• TheHUBZone programprovides assistance to small businesses with the aim of fueling growth in historically underutilized business zones.
• TheNatural Resource Sales Assistance programassists small businesses in securing state and federal government contracts through a bidding system that prioritizes them. Eligible industries include timber and forestry products, minerals, coal, oil, gas, and real estate.

Other US government grants

• TheUS Economic Development Administration (EDA)offers a variety of funding programs for projects that support regional economic development. Grant recipients receive funding for construction projects, construction planning, technology development research, and more.
• TheNational Institute of Healthis offering a wide variety of funding grant opportunities for businesses developing biomedical research related to COVID-19.
• TheSmall Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR)programs offer funding for technological research for small companies, with the goal of promoting high-tech innovation.
• TheUS Department of Commerce Minority Business Development Agency(MBDA) has a wide variety of small business programs intended to assist with the growth and development of minority-owned businesses throughout the United States.
• TheUS Department of Energy clean energy grantsare offered to businesses that have previously received SBIR or SBTT funding to assist in creating clean energy and to fund companies whose goals are to combat climate change.
• The US Department of Agriculture’sRural eConnectivity Programoffers grants to businesses and projects that assist rural communities in recovering economically from the impact of the COVID-19 pandemic, particularly in disadvantaged communities or that help to mitigate the effects of climate change within rural communities.

Non-government issued grants

• TheComcast RISEInvestment Fund offers assistance for independently owned businesses providing funds for advertising, commercialization, and marketing consultations, media placements, commercial creative production services, and other technical assistance.
• Activist-minded outdoor brandPatagoniaoffersfunding for small businessesseeking to address the root causes of climate change and confront environmental injustice.
• The National Association for the Self-Employed is an organization that provides a broad-range of assistance programs for small businesses, with the goal of keeping markets competitive and preventing monopolization by larger companies. The NASE offersgrowth grantsof up to $4,000 for small businesses that it believes have the potential for growth.
• The500 Global Flagship Accelerator programprovides startup capital for fast-growing technology companies with the goal of promoting technological innovation.
• TheHalstead Grantoffers a grand prize of $7,500 in start-up capital, as well as smaller grants to businesses offering innovation and advancing the artistry of the jewellery industry.
• TheStartOut Founders Programaims to provide resources for LGBT-owned businesses at all stages of their development, from aspiring founders just developing their ideas to established companies.
• The StreetShares Foundation is a non-profit organization dedicated to assisting veteran-owned businesses with access to financing and educational material. ItsVeteran Small Business Awardgrants funds to veteran-owned businesses, especially ones that address social change within the military community.

Grants for Women-owned businesses

• TheWomen Who Tech Grants Programprovides grants for women-owned tech and health tech startups, with the goal of closing the gender gap in the tech industry.
• TheCartier Women’s Initiative Regional Awards programoffers yearly grants to women-owned businesses in their initial stages of development that are working to meet one of the 17UN Sustainable Development Goals.
• IFundWomenis a marketplace for women-owned businesses to network and secure partnerships and financing opportunities. It often partners with companies like Adidas, American Express, Diageo, Unilever, Visa, and more to offer grants to women-owned businesses.
• TheFoundation for a Just Societyoffersgrantsto local, national, regional, and international organizations that work to advance the rights of women and LGBTQI people. The FJS focuses its efforts in Francophone West Africa, Mesoamerica, South and Southeast Asia, and the US Southeast, as well as some areas of New York City.
• TheAmber Grant Foundationis a community of entrepreneurial women who assist other women in starting their entrepreneurial journey. The organization gives away $10,000 each month and an additional $25,000 each year to women entrepreneurs.
• TheHello Alice Small Business Growth Fund提供的资助to $5,000 to small business owners, “including women, people of color, veterans, LGBTQ+ folks, people with disabilities, and every American with an entrepreneurial dream and the will to work for it.”
• HelloAlice, in partnership with DoorDash, is also currently offering grants via theirRestaurant Disaster Relief Fund, with the goal of assisting restaurants in recovering from the COVID-19 pandemic.

Grants for BIPOC-owned businesses

• ThePower Forward Small Business Grant, a combined effort of Vistaprint, the Boston Celtics Shamrock Foundation, and the NAACP, awards grants of $25,000 on a rolling basis to Black-owned small businesses throughout New England, with the goal of creating entrepreneurial opportunities for underrepresented communities.
• Grow by Invoice2gois offering up to $15,000 to entrepreneurs that identify as Asian-Indian, Asian-Pacific, Black, Latino, Native American or Alaska Native, Arab or Middle Eastern, Native Hawaiian or Pacific Islander, LGBTQ+, or as a person with a disability.
• Go.Be.is a nonprofit organization dedicated to assisting BIPOC-owned businesses by offering tools and resources that promote growth and development. Among these is its Elevate Fund, which provides minority-owned businesses with up to $4,000.
• Offer by theSoGal Foundation,Black Founder Startup Grantprovides $10,000 and $5,000 cash grants to Black women and Black nonbinary entrepreneurs. It also provides resources for navigating the complex world of the Silicon Valley fundraising environment.
• Created in response to the COVID-19 pandemic, theBIPOC Small Business Grantfrom AnnuityFreedom.net offers recurring grants each month for entrepreneurs who are Black, Indigenous, or people of color.
• Backstage Capitalis an investment fund that focuses on under-represented groups in entrepreneurship, offering funds for small businesses owned by women, people of color, and LGBT founders.
• Main Street America’sInclusive Backingprogram offers funds to new entrepreneurs from under-represented communities⁠—especially those harshly affected by the coronavirus pandemic.

Additional funding opportunities

Aside from small business grants, there are a lot of other ways for a new business to secure the startup funds it needs to grow. If you’re looking for other methods of financing your startup, here are a couple of options to look into:

Small business loans

Business loans are one of the most common ways that new entrepreneurs secure funding for their businesses. Unlike grants, loans do need to be repaid, so it’s important to understand how much money you need, what it will be spent on, and how you plan on making the money back.

Learn more:How to Get a Small Business Loan and What to Know Before Applying

Crowdfunding

Crowdfunding has become one of the most popular methods of raising money for startup businesses, largely due to onlinecrowdfunding sites使其能够访问将近一个yone.

Rather than seeking a large sum of money from an organization or angel investors, crowdfunding involves collecting small sums of money from ordinary people that believe in the potential of your own business.

Learn more:How to Do Crowdfunding in 2022: With Expert Tips and Examples from Successful Campaigns

Equity crowdfunding

Equity crowdfunding is similar, but a little different from ordinary crowdfunding. With equity crowdfunding, everyday people commit smaller sums of money to your business in exchange for equity.

直到最近,新企业只能卖沙res to accredited investors, meaning that there was strict net worth criteria that kept members of the public from being able to invest. The restriction also acted as a huge barrier to entrepreneurship, since newer merchants are less likely to have built a network of wealthy investors.

With equity crowdfunding, investment and entrepreneurship have become more accessible than ever.

Learn more:Equity Crowdfunding: Is It Right For You?

Capital investors

Capital investors refer to both angel investors and venture capital funds. Accredited investors can help provide funding for your business startup in return for equity ownership or convertible debt (a loan that may be converted into equity in the future).

The biggest benefit to capital investors is that they can provide you with large sums of money in a relatively short amount of time. At times, they can also provide valuable mentorship as you work to grow your own business.

Learn more:

• When to Pursue Capital: Key Financial Moments for Entrepreneurs and Growing Businesses
• Investing in Your Business: What You Need to Know Before You Get Started
• 如何开始电子商OB欧宝娱乐APP务业务: Build, Launch, and Grow a Profitable Online Store

Fuel growth in your startup with a small business grant

The first few months of running a business are often the most challenging. It takes time for a business to become profitable, but costs can add up quickly.

Small business grant programs can make a world of difference for a new business owner. Not only do they provide a vital injection of funds, but they can also help to establish connections in your industry and build buzz around your product.

If your business has the potential to innovate your industry and build new technologies to serve the public good, chances are you’re a great candidate for a small business grant.

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