Small-Business Grants You Should Know About

What Is a Small-Business Grant?

A small-business grant is an award, generally financial, provided by one organization (often a firm, foundation, or government) to a company to support a goal or incentivise achievement. Grants are simply gifts that normally do not have to be paid back.

Small-business grants are aimed to a range of goals, from launching a firm or helping it function more effectively to assisting its growth. Grants are not merely free money, however. The money must be utilized in line with the conditions of the grant, and if they are not, they will have to be paid back—possibly with interest.

How Small-Business Grants Work

Grants are customized to a certain goal, and the application procedure is often stringent and time-consuming. The federal government delineates what it termed “the grant lifecycle,” which comprises three parts.

Pre-Award Phase: During this phase the grant-awarding government agency selects what it wishes to finance, announces a grant (or awards), and receives and assesses applications.

Award Phase: Applicants are advised whether or not they have been accepted, the agency works with the grantee(s) to prepare the legal structure for the financing, and the monies are distributed.

Post-Award Phase: A grants management officer is designated to supervise grant compliance over the life of the grant(s) via periodical reports filed by the grantee(s) and on-site audits. Eventually, each grant is closed out after it is decided that the objectives have been met and the cash spent.

Types of Grants for Small Businesses

There are at least five main broad categories of small-business grants, available from various grantors. Within these five categories are opportunities too many to define in one essay, and the categories may occasionally overlap.

The most comprehensive source for federal company grants is the government website grants.gov, which maintains a database of thousands of potential business awards. GrantWatch is an online database of over 27,000 awards, including more than 1,000 small-business grants. It offers a free membership, or you may pay for a subscription lasting a week ($18), a month ($45), a quarter ($90), or a year ($199), which gives further services such as keyword search and complete grant details.

Federal Small-Business Grants

• The U.S. Small Business Administration (SBA), a government agency, is a main provider of restricted small-business subsidies for specific designated objectives. These include:

• Research and development: If your firm undertakes scientific research and development, you can qualify for a grant from the Small firm Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs.

• Management and technological assistance: The SBA’s 7(j) Management and technological Assistance Program aids small firms that supply management and technical assistance and direction to other qualifying small businesses. The objective is to assist them be competitive in securing federal, state, and local government contracts as a prime or subcontractor.

• Export development: The SBA’s State Trade Expansion Program (STEP) “provides financial awards to state and territory governments to assist small businesses with export development.” To date it has awarded more than $200 million to help small businesses learn how to export their products, participate in foreign trade missions, design international marketing products and campaigns, support website globalization and e-commerce possibilities, pay for subscription services provided by federal agencies, and participate in export trade shows and training workshops.

• Entrepreneurship promotion: These funds do not go directly to small enterprises. Instead, they go to community groups that encourage entrepreneurship via counseling and training programs, including organizations that assist veteran-owned and service-disabled veteran-owned enterprises and government-sanctioned “small business development centers.”

State Or Regional Small-Business Grants

• As indicated above, the SBA offers grant money via STEP and its Small company growth Centers that ultimately finances small company assistance and growth on the state or regional scale. In addition, the U.S. Department of Commerce has two programs that finance a range of awards given statewide or region-wide. They are:

• Minority Business Development Agency (MBDA): The MBDA helps minority business companies owned and controlled by African Americans, Asian Americans, Hasidic Jews, Hispanic Americans, Native Americans, and Pacific Islanders. Through a network of business centers, specialist centers, and grantees, it delivers at the state and regional level “customized business development and industry-focused services to provide greater access to capital, contracts, and markets.”

• Economic Development Administration (EDA): The EDA has a grant investment portfolio that ranges from planning to infrastructure construction designed to enhance “local efforts to build, improve, or better leverage economic assets that allow businesses to succeed and regional economies to prosper and become more resilient.” Its investment priorities include projects that advance equity for underserved populations and communities, recovery and resilience from economic shocks, workforce development, manufacturing, technology-based economic development, environmentally sustainable development, and exports and foreign direct investment. Its funding are competitive, and each state has its own agency.

Corporate Small-Business Grants

• Corporations are normally interested about displaying a favorable image to the public, and philanthropy is one method to achieve so. This may take the shape of grants to noble organizations, frequently nonprofit ones, but it can also take the form of small-business grants. Here are merely a handful of what is out there.

• DoorDash Disaster Relief: The popular meal delivery startup runs a relief fund that gives $10,000 grants to “selected restaurants across the United States, Puerto Rico, New Zealand, Australia, and Canada affected by natural disasters like fires, floods, and hurricanes.” The restaurant must have a brick-and-mortar location (and no more than three of them), employ 50 or less people, have been operational for at least six months, and have sales of $3 million or less per location.

• Visa Everywhere Initiative: The firm behind the globally recognized credit card conducts a worldwide competition among fintech companies from five regions—North America, Europe, Asia Pacific, Latin America, and Central Europe, Middle East, Africa (CEMEA)—for a $50,000 Overall Winner reward. Visa is searching for firms that offer “products that deliver innovative payment and commerce solutions to consumers and businesses.” Also offered are an Audience Favorite award of $10,000 and a Visa Direct grant of $10,000. Local and regional awards ranging from $10,000 to $40,000 are also granted. Applications are closed for 2023, so get on your mark for 2024.

• FedEx Small Business Grant Contest: The legendary shipping firm gives awards to small companies “to be applied toward growing or enhancing their business.” To be eligible, a firm “must be for-profit, have a valid FedEx business shipping account number, currently ship with FedEx, and have fewer than 99 employees.” Grants of $30,000, plus $1,000 worth of FedEx Office print services were presented to 10 small companies in 2023.

Read Also: Essential Startup Growth Strategies

Specialty Small-Business Grants

• All grants are dedicated to a specified objective, although some are directed specifically at a designated population. It might be the LGBTQ+ community, veterans, or—as with DoorDash above and the SoGal Foundation below (see "Start-up grants for small businesses")—restaurant owners (DoorDash) and self-identified Black women and nonbinary persons (SoGal). Here are a number of such instances.

• Queer to Stay Initiative: A joint initiative of the Human Rights Campaign and Showtime, working with Visa, the Queer to Stay Initiative will provide scholarships to at least 25 LGBTQ+ small businesses throughout the nation in 2023. A major purpose is simply to maintain safe venues for the community available. You must be a U.S.-based for-profit company, mainly serve/cater to the LGBTQ+ population, and describe how you have been severely affected by the Covid-19 epidemic. Special attention will be given to firms that are community-owned. Application deadline is Aug. 31, 2023.

• Military Entrepreneur Challenge: Run by the Second Service Foundation, the Military Entrepreneur Challenge "is a countrywide grant program that allows veteran, military spouse, and Gold Star family entrepreneurs the chance to network, learn, and compete for funding to expand their small company." You prepare a pitch for your firm that must be given first to a panel of judges and then to a live audience. The judges pick who goes to the final round, and the crowd chooses the winner. Grant amounts and prizes vary dependent on event. In the forthcoming 2023 Challenge round in Arlington, Texas, set to be held Oct. 4-6, cash awards are $1,000 or $2,000, with a $5,000 PR package and a $25,000 in-kind legal services package.

The Bottom Line

Small companies are a crucial component of the American economy, which is likely why there is such a variety of assistance for them in the form of grant money. That assistance may come from the government—federal, state, or regional—corporations, private firms, nonprofit organizations, and other institutions. It normally must be utilized for specified aims and is frequently directed at certain populations. So don’t by bashful about it. If you and your small company are in need, go out and discover the grant that’s tailored for you.