Small business grants are a convenient way to strengthen your business’ balance sheet and cash flow during times of financial distress.
Normally these grants are extended by government agencies or they could also be supported by private initiatives like the FedEx Small Business Grant or the Visa Everywhere Initiative.
If you are not familiar with how these grants work, you should give this article a look, they could be exactly what your business is needing right now to thrive while the COVID-19 situation subsides.
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Learn more about small business grants
Imagine small business grants as seed money for businesses that are either in need of cash due to certain unforeseen negative circumstance or as a way to promote a business model that favors society by helping a community, by creating more jobs for a certain group of individuals, or by launching a product or service that disrupts a particular industry.
What’s the difference between a grant and a business loan?
According to caminofinancial.com. Grants are given especially to federal and nonprofit organizations, the amounts of money tend to be smaller than a loan; another difference is that you don’t pay back a grant.
The government or office that offers the grant agrees to give the money because they’re aligned with the mission or initiative of the organization in need. Small private businesses can apply and even get a grant, but they need to prove that they’re worthy of it. Here’s a great resource for starting a nonprofit in Texas – read here.
How does a small business grant work?
Businesses can see tremendous benefits from obtaining a small business grant as this is an inexpensive source of funding that can help a company grow, establish, or even stay afloat.
The Economic Injury Disaster Loans are an example of government-funded business grants, which are backed by the Small Business Administration (SBA). These grants can provide advances of up to $10,000 for small businesses, especially the ones affected the most by the pandemic. Businesses that receive these loans don’t have to pay the money back.
On the other hand, an example of a small business grant backed by a corporation is the $5 million Amazon Neighborhood Small Business Relief Fund, which Amazon.com has created to support small businesses in Seattle.
Advantages of applying for a small business grant
We can’t deny the benefits of small business grants, because they usually exceed those of other funding alternatives like small business loans or cash advances, as grants are essential “gifts” that an institution extends to a company as a way to provide relief during times of economic instability or to promote the business’ growth.
Therefore, the main benefit of a grant is that they are usually inexpensive
Additionally, small business grants can also help businesses from a marketing standpoint, especially if the grant is designed to promote the company instead of just providing a financial lifeline.
In this regard, businesses can raise awareness about their products or services by being selected for a particular grant such as the Visa Everywhere Initiative, which grants a total of $150,000 to companies that create innovative solutions that tackle the world’s most complex payments and commercial issues.
Become eligible for a small business grant?
The application process, criteria, and documents required by each grant are usually different as they vary depending on their individual scope.
For example, government-backed grants like the Economic Injury Disaster Loan didn’t have any particular requirement except for the fact that the business must be a small business – according to the SBA – or a qualified agricultural business located in any state of the United States.
That said, other government-backed small business grants tend to have a stricter criterion for eligibility, which is the case of the Grants.gov federal program. The application process for private small business grants is normally much more goal-oriented, which means that the criteria will respond to the specific scope of the grant.
Write a detailed and competitive application
First, you’ll need to look out for institutions that offer small business grants, it can be government or privates. After you found one, you and your team will have to read the process carefully and make sure to have all the documents necessary to apply. The application will be crucial.
Part of the grantor’s job is to detect companies or small businesses that are not in the need of a grant and just want easy money from them. And, since they want that money to go to the right hands, with organizations that have a positive impact, you have to gather all the information you can and the application must include every detail that makes your company worthy of a grant.
Your application won’t be the only one they will be reading, so it has to be competitive. A killer small business grant application should demonstrate that you have a plan for using the money and know the impact it will have on the field you consider important. Make sure to bring up your business numbers, accomplishments, and workforce behind it.
If you know someone who has been given a grant before, talk to that person, and ask more about his company, story, and process to get it, also, study winning cases for inspiration. And make sure your proposal is perfectly written, with no misspelled words, and finish on time, don’t be the one who sends it one hour before the deadline.
Finally, if you’re given the grant, follow up on your company’s work to make sure you are doing everything it takes to accomplish your goals.
Take a look inside your own business
Small business grants can be the answer for you if you are struggling to keep your business afloat as a result of the pandemic or any other unexpected circumstance that jeopardizes it and your employee’s jobs.
Regardless of which scenario is currently motivating you to apply for a grant, you should consider that the people who offer it expect the money to create a positive impact on whatever field they’re interested in and you will have to plead your case in order to get one. It’s not impossible, but it takes more work than getting a small business loan.