One way to successfully expand your business is by using small business grants. These grants offer free money for startups and existing businesses.
A business grant is defined as financial assistance given to a person, business, nonprofit, or corporation from federal, state, county, or local governments, or private businesses or corporations. In fact, numerous companies, nonprofits, and government agencies provide money to small business owners in the form of a small business grant. And the best part is that grants do not require repayment.
Many people do not quite understand the difference between a business grant and a loan. While loans require you to repay the money you borrow, a grant does not. Keep in mind that grants are taxable income, and the IRS considers business grants as income for tax purposes. Some business owners plan ahead, and factor awarded grant money into their quarterly estimated payments, or they set aside extra funds in case a larger-than-expected bill arrives during the tax season.
Search for small business grants: Government agencies, state organizations, and private corporations offer these types of grants. Begin your search with grants.gov, a government database. Also check out your local Small Business Development Center and nonprofits, such as the Local Initiatives Support Corp.
Understand the grant qualification process: Grant qualifications vary depending on the organization. For example, some grants give priority to businesses in rural or low-income locations, and some prefer businesses owned by minorities, veterans, or women.
Be aware of common types of small business grants: There are several types of available grants. For example, the government offers grants, such as those provided by the U.S. Small Business Administration and the National Institute of Health. In addition, private companies offer grants that are more general and open to a wider base of businesses.
Seek out federal small business grants: One of the biggest distributors of business grants tends to be Bottom of Form government agencies. These grants provide great opportunities for small business owners who are looking to expand. For example:
Grants.govis a comprehensive database of grants administered by various government agencies, such as the U.S. Department of Education and the Department of Veterans Affairs.
Small Business Innovation Research and Small Business Technology Transfer programs: The SBIR and STTR programs fund a diverse portfolio of startups and small businesses across technology areas and markets. The goal of the program is to stimulate technological innovation and meet federal research and development needs. SBIR and STTR fosters and encourages participation in innovation and entrepreneurship by all people, including women, people of color, people with disabilities, and entrepreneurs located in all 50 states and U.S. territories.
Only U.S. small businesses are eligible to participate in the SBIR/STTR programs. A small business must meet the eligibility requirements, which include the following:
–Organized for profit, with a place of business located in the United States
–More than 50 percent owned and controlled by one or more individuals, who are citizens or permanent resident aliens of the United States. Or by other small business concerns that are each more than 50 percent owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States
–No more than 500 employees, including affiliates
Look for state and regional small business grants: These grants provide opportunities for small business owners who are looking to expand. For example:
Economic Development Administration: As the only federal government agency focused exclusively on economic development, the U.S. Department of Commerce’s Economic Development Administration (EDA) plays a vital role in facilitating regional economic development efforts in communities across the nation. The EDA’s investment policy is designed to establish a foundation for sustainable job growth and the building of durable regional economies throughout the United States. This foundation builds upon two key economic drivers – innovation and regional collaboration.
Small Business Development Centers: SBDC programs deliver professional, high-quality, individualized business advising and technical assistance to existing small businesses and pre-venture entrepreneurs. SBDCs provide assistance to help small businesses access capital, as well as develop new technologies and improve business planning, strategy, operations, financial management, personnel administration, and marketing.
Types of corporate small business grants: Many corporations and large companies support businesses via small business grants. Some provide grants to nonprofits servicing particular industries, and some offer grants to for-profit companies. For example:
FedEx Small Business Grant Contest: The FedEx Small Business Grant Contest is a grant program by FedEx to award 12 U.S.-based small businesses with grants up to $50,000 and up to $7,500 in FedEx Office print and business services. The prizes include:
–Grand Prize: One winner of $50,000 and $7,500 in FedEx Office print and business services
–2nd Place: One $30,000 winner and $5,000 in FedEx Office print and business services
–3rd Place: Ten $15,000 winners and $1,000 in FedEx Office print and business services
There is no question that small business grants are worth the time and energy required in researching and applying. After all, receiving money you don’t have to pay back is a clear win-win for any growing business.