Small business grants can be an excellent source of funding for entrepreneurs. They can also encourage businesses to bring their best to the forefront in order to be competitive for grant money. However, most grants come with rules and restrictions for qualifications, and applying for a grant doesn’t mean that you will get it. If you’re thinking of applying for a grant, keep the following in mind.
Federal grants are restricted
Because they are funded by tax dollars, federal grants can be extremely hard to attain. According to the Small Business Administration (SBA), “Grants from the federal government are only available to non-commercial organizations, such as non-profits and educational institutions in areas such as, medicine, education, scientific research and technology development.” Many states have small business organizations through which grant funding could be available for certain business activities. However, these grants also tend to be restricted. Set up an appointment with your local SBA to determine if your business is eligible.
In some cases, members across an industry may be eligible for grant funding for certain projects. In a fiscal year, local, state and federal governments often set aside money for research and development, the arts, healthcare and other industries. Again, these grants are competitive, and your project must meet specific criteria. The Nevada Department of Business and Industry explains that, “The grant authority varies widely among agencies. Some business grants are available through state and local programs, nonprofit organizations and other groups. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.”
Try finding corporate opportunities
Where federal and smaller government grants are restricted, some corporations have stepped in to offer funding to entrepreneurs. Many of these grants come in the form of contests by which small startups compete to obtain funding from larger corporate sponsors. Large corporate entities are able to extend resources to small businesses to help them network and gain visibility. These opportunities may be buried in the internet, so it’s up to you to locate them and determine whether or not your business qualifies.
Grant funding is a good source of capital for those who qualify, but the restrictions associated with receiving grants can make them a daunting challenge. Your local small business administration can help you find grants for which you may be qualified, and give you advice on these and other sources of funding for your business.
This article was written by Alaina Brandenburger for CBS Small Business Pulse