Winning a grant for your small business can be a dream come true. As long as you fulfill the terms as promised, you get a small business funding option that you don’t need to pay back. It’s no surprise that there’s high competition for the limited grant opportunities out there. But securing a no-strings-attached funding boost? That’s worth the time and effort it takes to complete and submit small business grant applications.
In this overview, you’ll learn about the small business grant process and get tips to boost your chances for approval. You’ll explore steps for applying – from finding the right opportunities to ensuring that your applications are complete and competitive.
Finding small business grants
Grant opportunities are as varied as the funders, who include local foundations and community organizations, state and federal agencies, corporate conglomerates, and more. The sizes of the awards vary, too, from a few hundred dollars to several thousand. Depending on specific opportunities and the funder’s goals, small business grants can fund launches, expansions, research and development, and more in a range of industries.
While there are more businesses looking for grant funding than actual grant opportunities, as long as you’re in the game, you stand a chance of winning. That said, not all grant opportunities are a good match for all businesses, so you need to make sure that your business meets the funder’s eligibility criteria and goals. They’ll often list previous grant winners, so take a look at those to determine whether your business aligns with who they fund.
Here are some sources/resources to get you started:
- Local business development organizations can be a good resource for grant-funding opportunities. Explore your local Chambers of Commerce or Industrial Development Agencies, as well as Small Business Development Centers (SBDCs).
- You may find industry-based grant opportunities through trade organizations or through local or state agencies. These opportunities are tailor-made for your business and show an investment in growing your industry locally or nationally.
- Corporations may offer grants for new businesses, for research in a specific field, or to grow entrepreneurship in underserved communities. They may hone in on geographic areas, women and/or minority business owners, and other groups that have faced challenges securing funding. To find these opportunities, look directly on websites for specific companies or use NerdWallet’s grant finder tool.
- There are small business grants available at all levels of government. They’re often presented as requests for proposals (RFPs) and it’s important to review them thoroughly before you apply:
- Check your local municipality and county as a starting point. Grants on this level often support target industries, under-served communities, or locale-specific goals, like supporting new business launches or storefront beautification.
- Find state opportunities through your state’s economic development agency. You may find grants that target specific industries, such as manufacturing, or for goals like increasing the use of sustainable-energy sources.
- Federal opportunities can be found by searching grants.gov or specific agencies that align with your business. For example, if your business is located in a rural region, check the U.S. Department of Agriculture (USDA) website for grants in your area.
- Check your local municipality and county as a starting point. Grants on this level often support target industries, under-served communities, or locale-specific goals, like supporting new business launches or storefront beautification.
A few key points on government small business grants
For government grants, be prepared for more complex reporting requirements. Be sure to review all of the information in an RFP – it will outline important considerations such as record-keeping, evaluation, MWBE requirements, and reporting for each grant.
Federal grants, and some state grant opportunities, may ask you to register your business well in advance of the grant deadline. If that’s required, start the process before beginning your grant application.
In many cases, government grants are paid as reimbursement, meaning that you won’t get the funds until the terms of the grant are complete. For example, if you applied for funds to purchase equipment to make your agriculture business more energy efficient, you may be required to purchase and install that equipment before receiving the grant funds. This will be spelled out in the grant’s RFP, so review it thoroughly.
6 top tips for small business grant applications
There are only so many grant opportunities out there and tons of businesses applying for that funding. How can you make your application stand out from the others? Here are a few tried and true tips:
1. Be prepared for the grant funding process
The idea of “free money” is so appealing that many entrepreneurs start the process without proper preparation, making it more stressful than it needs to be. Before you apply:
- Understand the timeline: Depending on a funder’s process, it can take anywhere from a few weeks (for smaller local organizations and agencies) to nearly a year to receive a decision (for federal grants).
- Apply early: Start each application well before the deadline to give yourself time to create the strongest presentation of your business. Then submit your application at least three days before the actual deadline.
- Have your documents ready: This includes your business plan, financial projections, and tax returns, and any other required documentation for the application.
Know that if you get funding, you need to spend it as you proposed in your application. You can’t use the funding for a different purpose without prior consent from the funder. For example, you can’t decide to use an equipment grant on staff compensation. If you don’t fulfill the terms as promised, you may have to return the grant funds.
2. Follow the application directions exactly as stated
Some grant applications are simple, others are very complex, but all include directions that outline the exact information you need to include. If you don’t follow the directions as stated, you could risk having your application rejected before it’s even fully reviewed.
3. Tailor you application for each opportunity
You’ll find that the same information is requested in most applications. It’s alright to reuse this information, but it’s also best to refresh it so that it’s tailored to each specific funder’s goals and priorities. Think of it like submitting a resume and cover letter for a job opportunity, where you’re highlighting the skills and qualifications that best fit the potential role.
Also, when relevant, boost your narrative by including brief testimonials, client lists, community leaders, or other information that adds credibility.
4. Highlight your business and the grant’s potential impact
Help the funder understand why you need the funding and how it will positively impact your business. Tell them how the funding will be used, what specific and measurable outcomes you expect, and how they’ll be measured. If relevant, also show how this may help you positively impact your community or industry, too, by creating jobs or mentorship opportunities, for example.
5. Prove your business plan and financial projections
Present a well-researched and achievable business plan, including financial projections and potential to grow. This is your opportunity to demonstrate that you’re a responsible financial manager and inspire confidence that the funds will be used to grow your business.
6. Proofread, ensure that your application is complete, and submit!
Remember that funders will be reviewing hundreds or thousands of applications – make it easy for them by ensuring yours is complete. It’s even better if you give them an interesting and compelling story! If possible, ask someone who hasn’t worked on the grant application to review it and provide feedback. Then, put your complete application together and submit!
Small business grant FAQs
1. Can I apply for multiple grants?
You can apply for different grant opportunities from different funders, but some funders will only allow you to apply once per year for one grant opportunity (if they offer multiple). This should be specified in the application information.
2. How competitive are small business grants?
Small business grants are competitive, however, the specifics of each opportunity may limit the competition. For example, if a grant is only available for a particular industry or geographic location, the applicant pool will be more limited than a national opportunity.
3. Are there specific grants for underserved or target entrepreneurs?
Yes, there are grants that support underserved communities, including minority- and/or women-owned businesses (both those that are certified MWBE businesses and those that aren’t). You can also find small business grants for veterans and their families, LGBTQ+ business owners, entrepreneurs opening businesses in target geographic areas, immigrant business owners, and more.
4. What should I do if my grant application is rejected?
Although disappointing, the majority of grant applications are denied simply because the number of applicants is higher than the available resources. Keep in mind that a rejection from one funder doesn’t mean that you won’t ever get a grant. It could just mean that it wasn’t the right funding opportunity or the right time for your business. Sometimes, funders provide feedback and if so, use it as a learning opportunity. Then, keep your eyes open for new opportunities and try again.
Benefits beyond a grant
Even though grant opportunities are competitive, the time you spend crafting small business grant applications is always worthwhile. In a best-case scenario, you win funding for your business. And at the very least, you’ll have updated and clarified your business plan, financial projections, and competitive advantages and challenges – all of which have significant benefits beyond winning a grant.
Another benefit? The information that you need to apply for a grant includes many of the same documents to apply for a small business loan. So, as you’re completing grant applications, make sure you’re also reviewing small business loan options. Pursuit offers more than 15 business loans tailored to meet the needs of small businesses in New York, New Jersey, Pennsylvania, and Connecticut. Take a look at what’s available, then contact us to learn more – there’s no obligation and you may just find the exact financing you need!
