Federal Grants for Small Business

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There are many different ways of funding a small business. In order to start a new business or expand an existing enterprise, people may take money from their savings accounts, ask friends and family members for help, apply for loans or even use credit cards. However, there's another option available: a federal grant program. Federal grant programs provide money for handling business expenses, and the recipients do not have to repay the money they receive.

Definition

Grants are awards of monetary assistance that you do not have to pay back. When you apply for a federal grant, you are requesting money from the federal government. The federal government does not provide small business grants to fund personal expenses or to help individuals repay personal debts.

Sources

Finding federal grants for small business use may require a significant amount of effort. First, you'll need to identify sources for small business grants, and then you'll need to wade through information about eligibility requirements. However, there are some websites that make finding and applying for government grants easier. One example is grants.gov, which is a government-run site that allows people to register, search for grant programs and apply for grants. The Catalog of Federal Domestic Assistance also provides information about agencies that offer grants and their eligibility and application requirements. Neither site is strictly for small businesses, however, so you may need to search through the provided information to find what you need.

Applying

Grant proposals are often a very important part of the application process. A grant proposal is a formal document grant seekers use to request grant money. You may have to submit a grant proposal, or you may apply via an application form. Because many people want grants for their businesses, you're likely to encounter stiff competition. To enjoy the best chance of getting the money you need, follow the grant program application instructions carefully, submit your proposal on time (many programs have strict deadlines) and make sure your proposal is neat and free of spelling and grammar mistakes. If you are unsure of your grant-writing skills, consider hiring a grant writer--a professional who specializes in writing grant proposals--to help you.

Types

There are many different types of grants for small businesses. Some of them are intended for the beginning stages of a business, while others may help a business expand. There are grants that are intended for women or other minorities, and some are reserved for businesses in certain industries. There are even grants designed for people starting or running businesses in certain areas, such as low-income cities or towns. You must meet the specific eligibility requirements of the grant program you choose.

Warning

Beware of unscrupulous companies that advertise guaranteed grant money. There are no guarantees when it comes to applying for a grant, and you will have to complete the application process and wait for a response. Some companies charge fees for lists of grants that grant seekers can find on their own, without spending money.

References

• University of North Carolina at Chapel Hill
• Center for Participatory Change

Resources

• Grants.gov
• The Catalog of Federal Domestic Assistance