Grants for Starting A New Business
A business grant is financial assistance awarded by a funding agency, typically in the form of money, and sometimes property in lieu of money. A business that receives a grant is referred to as a grantee. A grantee who receives a business grant is responsible to account for the money spent in the manner specified by the grantor. New businesses are eligible to apply for as many grants as the business qualifies for.
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Grant Requirements
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To receive grants for a new business, a business owner must meet eligibility requirements of the grant. The qualifications of each grant depend on the organization or agency awarding it.
All agencies that award grants to new businesses require each business to submit a business plan or proposal. The plan should detail the nature of the business, start-up costs, any working capital the business already has and other details of the business. Some eligibility standards for receiving grant money include being a legal U.S. citizen and at least 18 years of age.
Government Grants
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The government awards grants to new businesses daily, but federal grants are only available to new businesses that are non-profit. Both state and local government agencies awards grants to businesses that are for profit.
Most government grants awarded to new businesses benefit the government in some way. For instance, a state government agency may award grants to new businesses that open in a specified small town. The purpose of the grant is to help create jobs and stimulate the business within that small town.
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Private & Corporate Grants
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Other types of grants available to new businesses include private and corporate grants. Private grants are typically awarded by a foundation, celebrity or organization that wants to give back to the community or set up a fund in honor of an individual.
For instance, the Amber Grant is a private grant awarded to new businesses. The grant was established in honor of an aspiring entrepreneur named Amber who never got the chance to open her business because she was killed in a car accident.
Corporate grants are generally specific to the state and region where the corporation conducts business. Examples of corporations that offer grants are Microsoft, Sprint, Verizon and Coca-Cola.
Minority Benefits
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New business grants are awarded for women, minorities, those with disabilities and other personal characteristics. An example of these types of new business grants would be a woman starting a new business. The Women's Financial Fund awards grant money to new businesses in the amounts of $100 to $5,000. All types of businesses are encouraged to apply, regardless of the business industry. The only requirement of this grant is to be a woman starting a new business.
Significance of Grants
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The amounts of grants awarded to new businesses are significant because the grants help cut start-up costs. A new business can use the monies awarded by public or private organizations and agencies to pay for office space, office equipment, employee salaries, equipment upgrades, incorporation fees, patents, trademarks, utility bills for the business and other expenses related to the new business. The grant money awarded to a new business may not be used for personal expenses, unless otherwise stated in the terms of the grant.
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