When starting a business, finding funding sources is a key concern. When opening or running a business, some owners may be interested in small business grants. They may consider this funding source as free money but there are important considerations for this type of funding.
A grant is an amount of money that is given to a person, corporation, or business. The funding may come from the government or a private source. Unlike loans which require repayment, a grand does not have to be repaid. This feature makes it an attractive financial consideration for businesses that are starting or need additional cash flow.
Grants may be specific to certain types of business owners. Veterans, women, disabled Americans, minorities and poorly represented groups can often find grants specific to their demographic. The key to obtaining a grant is to find the one where you qualify and then doing the work to apply for this funding source.
There are thousands of grants available today but obtaining them requires research. Most grants have strict requirements that have to be met. For example, a grant may specify that it’s designed for a women-owned company that has fewer than 25 employees. The key to finding the right grant is thorough research. Additionally, never apply for grants that don’t meet your business type or model.
One important consideration remains that technological companies often have an advantage for obtaining grants. The federal government offers grands through certain programs. However, businesses that receive grants from the government may be asked to repay other than money. For example, a company that performs research and development makes a great example. The government could request that any research findings be made available for state or federal governments to use.
There is not one single place to find grants but there are a few places to start searching. The Small Business Administration compiles a list of available grants. This website also features a search tool. Business owners search through their database to find grants specific to their needs. The federal government also has a site, grants.gov. This site provides a list of government based grants. Finally, the state’s official website often contains information about available grants. Many states offer grants to local businesses, especially if the business contributes to the prosperity of the test.
Grants appear to be a great funding source, but they may not be the best option. Keep in mind that grants require a significant amount of work. Finding and applying for grants takes hours for each one. Competition for grants remains tough, so all of this work may end up being wasted if your business is not chosen.
For businesses that may need the money within a certain time frame, grants may not be the best option. It can take months to be approved, which may not be an option for all businesses.
Finally, strings are often attached with the grant. Companies that decide to apply for grants should keep all of these factors in mind. In good scenarios though, grants provide a way for businesses to obtain funding.