To launch and expand a small business is challenging, and more than anything there is a huge requirement of funding for the small business.
The funding is necessary to accelerate the speed of the business, as all the business activities are dependent on it. There are several financial routes that you can take to secure funding for your business and one of them is through grants.
Grants are one of the major ways of raising funding for the business, both private and government grants are available which promise to help you with fundraising.
However, getting grants is not easy and there are various challenges to it. There is a long journey to secure the grant, you need to look for many factors before and after applying for a grant. With this reference, this article is made to inform you more about grants and what it takes to secure the same.
What does a small business grant mean?
Small business grants are given by the government to small businesses to launch, expand and develop their organization. Usually, it is observed that small businesses run out of funds in order to progress.
While many small businesses have a great potential to establish themselves as a large entity but funding issues refrain them from doing so. In order to help the businesses that, have the potential to grow government has enacted the scheme of small business grants.
Grants, unlike loans, do not have to be paid back, rather there are certain restrictions to it. Grant is not free money in literal terms, as with grants there come obligations that you need to fulfill.
In addition, availing of grants is not a simple cakewalk, you need to do a lot of research and preparations, as there exists high competition due to many people applying for the grants.
Entrepreneurs can take grants in several ways, such as from private corporations or from the government both federal and local. Besides, government grants are available according to demographics and specific industries.
However, many people think that government grants are limited but in reality, there are different grants for different industries. For instance, if you are a minority-based company then there are schemes for minority-owned businesses that are especially geared toward you.
How to search for different kinds of grants?
Grants can easily be found on the internet, as there are plenty of websites for them. Some of these websites belong to private corporations while the majority of them belong to the federal government. As you land on the website you will study different types of grants and the process of getting them.
Typically, you need to fill out a form first and then you proceed toward the original proceedings of getting a grant. Some of the top websites to find grants are SBA govt, Economic Development Administration, and freehudgrants.com.
These are government websites and websites for economically depressed communities to stimulate growth like job, housing, and commercial growth.
Difference between business grants and loans
The best thing about grants is you don’t need to pay the money back; you only need to utilize the given money in the best possible way and the purpose of using the money must be the same that you described in your application while filing for the grant.
Moreover, grants are not given on the basis of a person’s credibility as there is no obligation to pay the money back. However, the main basis on which grants are given is that your business must have the potential to grow, your ideas must be innovative and you must give a part of it for the development of society. In a nutshell, grants are more associated with innovation and moral values, they must solve a problem.
On the flip side, when you talk about loans, then there comes the obligation to repay the money back with interest within a stipulated timeframe. Loans are fundamentally given on the basis of a person’s credibility to pay them back. However, one big advantage of loans is you can secure the capital that you need to meet your business needs.
Whereas with grants, the amount is fixed and there is no negotiation over it, many times grant money isn’t enough to meet the business capital requirement, so there are loans to fulfill the gap. In addition, some lenders may have relaxed requirements such as lower interest rate and longer duration of repaying the money, that’s the plus point of getting loans.
What makes you eligible for a grant?
Applying for a grant is not easy, it involves a long process of paperwork, so it’s important that you apply for a grant you are eligible for. To narrow down your research regarding checking for different grants, visit the website and check for grant details and most importantly the deadline of each grant you are considering.
If the details of the grant you are looking for a match with business criteria, then move ahead and ensure that your goals align with the grant you are applying for. Businesses need to be aware of the grant policy that the fund must be used for productive purposes only and it must contribute towards social welfare or have the ability to solve a problem.
In addition, you need to make sure that the problem you are looking forward to solving must be different and genuine, as the ward of dignitaries checks for similar problems that are solved by other companies and the amount invested for it.
Getting a grant is no less than an achievement, as you go through a long process filled with challenges and hurdles. Although getting a grant is not enough, you need to use the money given to you in the best possible manner, as companies and governments keep a check on the purpose you are using the funds for.
Additionally, if you are into small business and you have something which has the potential to solve a problem then you can go ahead with applying for a grant. Getting a grant will give your business recognition and people will more easily understand the potential of investing in it.