Government branches and grant foundations provide small business grants to pay for the costs of starting a specific business. A grant is different from a loan in a way that the grant money does not have to be repaid and it can be utilized for covering costs such as initial investment in materials, equipment, wages, overhead or any other cost related to the operation of a business. One important matter that comes into mind when planning to get a grant knows which specific branch of the government or which organization can give you a grant and why they should do so. It’s important to note that governments and organizations don’t give away money for no good reason. There’s a specific criteria and process for considering a small business for grant.
Generally, funds are allocated by the federal government at the state level, hence giving grants is decided by each state. Applying for small business grants occurs at the local or state level. State governments may award grants to entrepreneurs that plan to start businesses that coincide with their programs and objectives. For instance, technology based businesses may be given more priority in a state that focuses to develop its economic sector. Or, a state that aims to boost the field of agriculture may opt to provide grants to those who plan to start small farms. Small business grants are given to start-ups with relatively small operations but have specific business plans.
To ensure that you have a high probability in getting your grant approved, check with your locality’s objectives and goals. It’s important to find out what your local government or state desires to develop in relation to small businesses. Assess if you business idea fits well into the statewide objectives. Present your business in the most optimistic light and come up with an excellent grant proposal or application.
Private foundations are also another source of grant money for small businesses. The grant application process with these foundations is basically similar with governmental sources. Same as grants provided by state governments, you should also try to get a good sense of the type of businesses private foundation awards money for and see if you can qualify. There’s a good chance of getting a grant if your business plan fits their criteria well.