Business grants may seem like the holy grail of small business owners, since they offer cash that you don’t have to repay.
But finding one can feel as futile as searching for lost treasure.
“Everyone wants to know: How do I get free money for my business?” says Jane Steinfeld, director of entrepreneurship and economic development at the National Association of Cities, an organization that supports local government officials nationwide. “And the answer I have is: It’s not that easy.”
this does not mean Small Business Grants Not worth pursuing – as long as you manage your expectations. Here are five tips to remember while searching.
1. Prepare in advance
Contest submission windows can be short. Prepare in advance so that you are ready to take advantage of the good opportunities.
Salt Lake City-based Niche Snowboards has been in business since 2009, but company leaders had never applied for a grant before learning about the FedEx Small Business Grant competition just four days before the application deadline. But they’ve already invested time and resources in a strong mission statement and marketing assets like photos and videos — helping them pull everything together at the right time.
“We had all the building blocks there,” says Anna van Pelt, creative director at Niche Snowboards. “We just had to put them all together to get this scholarship.”
The company won one of three grand prizes in the competition worth $50,000 in 2022. It plans to use the grant to develop a recycling program for waste manufacturing and invest more in marketing.
When evaluating grant applications, FedEx judges look at the company’s website, social media profiles, sustainability efforts, and whether they would be a good guide for other small businesses, says Kelly Martin, who manages the company’s grant program.
“These are questions you should have answered regardless,” says Van Pelt.
2. Understand the parameters and requirements
Local governments sometimes provide business grants as part of neighborhood revitalization or economic development programs. Facade grants and Walkway grants, for example, offer funding to help you update things like your storefront and signage.
You may encounter small groups of applicants in your area compared to national scholarship competitions. But these may be identical grants, which means that you have to invest some money in the project yourself. It may also target specific streets or narrow census areas.
Steinfeld says that awarding local government businesses “has a lot of conditions.” “There is a lot of data [business owners] They’re going to have to donate because that city is going to have to report on how all that money is used.”
3. Look in the right places
If the government grant does not fund a goal that is already in your business plan, it is probably not a good fit.
But if it does happen, you need to make sure you know about it. Sign up for email newsletters, attend networking events, and consider working with a local business mentor to see when these opportunities become available.
Locate your county website, locate your city, and meet with him [the] says Raj Tamper, a Las Vegas-based guide with small business training organization SCORE
Connect with local business development organizations as well. These organizations may host planned contests, where business owners can try to sell investors their ideas. Winners may receive grant funding or in-kind resources such as business training and office space.
Business incubator programs are the “only place I know” that make a real show Emerging Business GrantsSteinfeld says.
4. Watch out for scams
Beware of organizations that ask you to pay and pledge to submit your work to award competitions. It may be fraudulent.
“Anyone looking for a startup business grant should understand that there are a lot of grant scams out there,” says Tamper.
For a reputable source of information, Timber recommends Grants.gov, a website that lists business grants available from the federal government. You’ll also find tips on grant writing and how to report suspected grant fraud.
5. Go to other funding sources too
Don’t just rely on grant funding to move your business forward. If you’re lucky enough to get a grant, it can accelerate your growth – but it shouldn’t be the engine.
For example, the leaders at Niche Snowboards have turned to friends, family, and Small Business Loans To finance start-up and expansion. They also use a business credit card to fill in the cash flow gaps.
Steinfeld recommends building a relationship with a local bank as well.
“They have a lot more flexibility to underwrite than you thought…when they understand what you’re doing and they invest in you as a business owner,” she says.
Getting a job grant is exciting. But like many parts of running a business, it is far from easy. Niche Snowboards was one of only 10 winners out of nearly 18,000 applications.
“[Winning] “It made us cry,” says Van Pelt. “Because as most small business owners know, finance – and just the nature of small business – is intense.”