Do you need money to start your own business? Are you planning to expand your business? You can go to banks and apply for loan, or you can approach venture capitalists to finance your business. But here is another proposition: get a business grant. Just make sure that you secure a business grant from legitimate private company or from the government. The Internet is filled with bogus business grants. Don’t fall prey to fraudulent entities that promise fast and easy application process after paying for some bogus fees. The rule of the thumb is is: do not pay for the privilege of business grant application.
The process of applying for business grant is rigorous. Furthermore, there are specific qualifications that you need to satisfy. When applying for one, you need to prepare a business grant proposal, financial statements and permits. You should also be ready with a list of character references. Equally important, you have to be diligent and persistent. In this article, I invite you to learn 7 steps to help boost your chance of getting a business grant. The inputs come largely from the insights of Erica Quin-Easter, Microenterprise Coordinator for Women, Work, and Community in Aroostook County. (Read full story here.)
7 Ways to Get a Business Grant
1. Prepare a business proposal
Vocational rehabilitation services, like Social Security disability, supplemental income, and Temporary assistance for Needy Families (TANF) can provide you with the necessary support. But before you can get the needed support, these programs need to assess whether your business is viable or not. Your business plan should convince that your business has the capacity to generate income. You may need professional help in formulating a business plan. For entrepreneurs outside US, you can search for local equivalent of the above programs. Easter shares:
“Do you receive vocational rehabilitation services or Social Security disability or supplemental income? Each of these programs provides support for people who are pursuing self-employment to increase their income and move toward self-sufficiency. Do you receive help for your family through TANF? If you are pursuing self-employment as part of your family contract, you can tap up to $500 to help with expenses as you build your business. With each of these options, you’ll need to demonstrate that your business has the capacity to generate enough income to make it worth your while.”
2. Describe your business’s impact on local economy
Easter asserts: “Alone, your business is not eligible for these grants. But if you can demonstrate the impact your business has on community economic development — for instance, improving a local building and increasing the tax base; adding to downtown revitalization or commercial district development; creating jobs and generating employment — you often can tap into your community’s economic development plan to include matching funds for your business.”
The government does not give business grants directly to businesses. The government gives the money to Community Development Block Grant program or local foundations, which in turn can give money to small businesses. You have to convince them that your business can help improve the local economy.
3. Be sector specific
Easter raises these pointers: “Are you an artist? Check out Maine Arts Commission for funding for your creative projects. Are you an innovator in technology, manufacturing, forestry, aquaculture or agriculture? Check out Maine Technology Institute for matching grants to help you at each stage of developing, producing and promoting your product. Are you a farmer? Visit your local USDA Rural Development office to learn about grants for market development, value-added production and other aspects of agriculture.”
Furthermore, certain individuals are eligible for specific business grants according to the following categories: race, ethnicity, gender, and disabilities.
4. Make mission-based friends
Partner with nonprofit organizations. Help them achieve their goals, and they can also help you get business grants. It is a win-win process.
“Charitable and educational nonprofit organizations receive the bulk of grant funding thanks to their 501(c) 3 status… If your mission aligns with a partnering nonprofit organization, you may be able to work together to access funding that will move both of you forward” explains Easter.
5. Think green
The Government gives incentives to businesses that help cut down carbon footprints. When your business demonstrates serious adoption of ecologically sound practices, your business could be eligible for cash grants and tax incentives.
“Efficiency Maine and USDA Rural Development have funding to help your business become more energy efficient, and tax incentives may apply to your investment” adds Easter.
6. Activate your opportunity radar
Always be on alert for opportunities. Stay active and connected to your business community. There may be special announcements for grants which your business qualifies. Easter advises:
“Read the business pages of your local paper, subscribe to industry publications in your sector and keep your ears open… Many other small pockets of funding come and go. If you stay informed and connected to your business community, you will be first in line for future opportunities.”
7. Make your match
Easter stresses: “Free money does not grow on trees, and many of the programs above require some level of personal investment from you in your business.”
Grants specific requirements, and it is important at this stage that you understand that most programs require your investment counterpart. The rule of the thumb is to you have at least 25 percent of the total funding you need on hand before counting on grants. The process of obtaining a business grant can be stringent. You will have to be patient and determined to get that grant.
What other things can you share about grants for business? Please write your comments and your thoughts below.