Grant money is free money that never has to be repaid. Grants are ideal for entrepreneurs who need assistance funding their businesses. Federal, state and local agencies offer grants. You can even find grants to cover staff salaries. Keep in mind that grant funding often is limited and may require some research.
Federal grants are available to help organizations that meet the eligibility criteria. Although the majority of federal grants are aimed at assisting government, community, educational and nonprofit organizations or projects, some grants are offered to help small business owners. For grant purposes, the government defines a small business as a business with less than 500 employees for most manufacturing and mining industries and less than 100 employees for wholesale trade industries. The limit for retail and service industries is a net worth of less than $6 million. General and heavy construction industries are limited to $28.5 million.
Grants do not necessarily specify that they cover staff salaries. When applying for a grant, you will need to submit a grant proposal and include essential information about the project or business, such as the estimated staff salary. If you are a nonprofit organization, private and government agencies offer nonprofit seed money grants designed to cover salaries and other costs related to establishing a business.
Common Government Business Grants
If your business engages in scientific research and development, you may be eligible for federal grants under either the Small Business Innovation Research or Small Business Technology Transfer programs. A number of agencies, such as the Department of Agriculture, award SBIR and STTR grants. Each agency has its own eligibility criteria and requirements. Due to the competitive nature of these grants, they most often are awarded to established companies working to solve vital problems in society or the economy.
Small Business Association Help
The Small Business Association has the authority to award grants to nonprofit organizations but not small business. However, the SBA can help you find funding through state and local programs. If you are not eligible for a grant to cover staff salaries, low-interest loans backed by the SBA are available.