When starting your own business, funding is sure to be a top priority. Even the best ideas need some serious financial backing to get off the ground. Loans provide one solution, but they can land you in serious debt. Small business grants represent an alternative way to get the funding you need.
Before you can apply for a small business grant, you need to learn a bit about the types of grants that are available. This brief guide explains how grants work and who tends to provide them. Once you’ve understood your full range of options, you can begin the process of sending out applications. Before you know it, your small business could receive the influx of cash it needs to get going.
Business Grants Explained
Business grants are funds awarded by the government or a private entity to a business so that the business can get started or operate effectively. Unlike loans, grants do not usually have to be paid back. This means the business owner can use the funds to invest directly in the project without having to worry about debt-related ramifications.
Grants can be either public or private. Public grants are provided by the government, and they’re often harder to obtain. Private grants come from everyday citizens, corporations, or private organizations.
Four Main Types of Grants for Businesses
Most small business grants belong to one of four main categories. Federal grants come directly from the United States government, which has a vested interest in supporting businesses, promoting development, and boosting the job market. State grants come from state governments hoping to improve the business climate within their borders. Local grants, given my municipal governments, often come in the form of low-interest loans or tax breaks. Corporate grants, meanwhile, are given by a company to a smaller business with a similar goal or vision.
Applying for Grants From the Government
The Department of Energy, Department of Commerce, and Small Business Administration all provide small business grants. Each department seeks to further its objectives by supporting businesses that could bring social benefits to the country. States and municipalities, meanwhile, look to support companies that could vitalize the local economy. If you think your business corresponds with the goals of one of these departments or local governments, then it could be worth applying for a grant. You can search for grant-related opportunities on grant.gov, a simple tool that makes research easy.
Applying for Grants From Outside the Government
The private sphere is full of corporations, associations, and philanthropic organizations that support small businesses with grants. Funding is available to existing businesses and new initiatives alike. While finding these opportunities requires some research, you could discover an organization whose mission aligns with your business’s objectives. Once you find someone who is funding projects like yours, all you have to do is send in an application and hope for the best. If you land the grant, you’ll be that much closer to realizing your entrepreneurial dreams.
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