Using small business grants can be extremely appealing. After all, it’s money you don’t have to pay back, which means no interest payments, no late payments and no chance of losing any collateral. So, why doesn’t every small business owner forego a small business loan and take advantage of this free money?
As it turns out, grants aren’t as easy to get your hands on as you might hope they would be. Aside from finding one you’d be eligible for, you have to compete with other companies for the same money, and as you could imagine, they’re highly competitive. To qualify, you’ll need a strong application that adheres to strict guidelines.
The other downside is that grants usually come with specific instructions for how you can use the money. So, if you receive a grant for the innovation of new technology, don’t plan on using that money for next month’s payroll.
Of course, if you don’t mind some healthy competition, and you’re feeling a little bit lucky, a grant can give your business a huge leg up!
How to Raise Money You Don’t Have to Pay Back
Here are seven grants your small business should know about:
Federal small business grants
Since Federal Government grants are appropriated through Congress and are funded by tax dollars, they’re not so easy for small business owners to get. Typically, they’re awarded to non-commercial organizations and educational institutions, through which the money will be used in a way that helps to stimulate the economy.
Luckily, through programs like the Small Business Innovation Research (SBIR) program and The Small Business Technology Transfer (STTR) program, small businesses may still be able to qualify for a federal grant.
- Small Business Innovation Research Program
The Small Business Innovation Research Program encourages small businesses to engage in research or development projects that have a high potential for commercialization. The SBIR program is meant to increase private-sector commercialization, stimulate technological innovation and encourage entrepreneurship. Participating Federal agencies with an extramural research and development budget (R&D) exceeding $100 million are required to set aside 2.8 percent for these programs. Currently, 11 agencies participate in this program. - Small Business Technology Transfer Program
Similarly, the STTR program expands funding opportunities for federal innovation research and development. However, unlike the SBIR, the STTR requires collaboration between the agency and your business. Every year, STTR requires five federal departments and agencies to set aside a portion of their R&D funds to award to non-profit small businesses. The SBIR program and STTR program partner with agencies such as NASA, the U.S. Department of Defense, the U.S. Department of Agriculture, The U.S. Department of Energy and the U.S. Department of Education. Each of these agencies administers their own grant program within the guidelines established by Congress. Both of the above programs are highly competitive, but highly worth the effort of the application due to their major payoffs.
What is Seed Money and How Can Entrepreneurs Get It?
Corporate small business grants
The grants offered to small businesses by large corporations often come in the form of a contest. This might mean more work for you, but you stand to benefit by gaining more business exposure in the end through the contest’s publicity. Plus, these grants usually come with multiple prize winners. Below, find examples of grants available for small businesses, some which have already ran this year, and some of which are offered annually.
- Fedex Small Business Grant
Each year, Fedex has a small business grant contest, where the company awards grants to 10 small businesses nationwide. The grand prize winner will receive a check for $25,000. One runner-up winner will receive a $15,000 grant check, and the other eight companies will each receive a grant for $7,500. - Chase Mission Main Street Grants
To raise awareness for the role small businesses play in their communities, JPMorgan Chase Bank provides yearly grants to 20 small businesses. This year they offered a total of $2 million, giving each of the 20 businesses a total of $100,000 (plus a trip to LinkedIn headquarters). This grant comes with strict guidelines, so be sure to check them out before applying. - Miller Lite Tap the Future Grant
By participating in Miller Lite’s business pitch competition, you’ll have the chance to earn more than $200,000 to fund your business, as well as prizes in the form of seminars and additional resources. - Sam’s Club Grant Program
Although this grant program isn’t directly awarded to small businesses, it does fund nonprofit organizations that are committed to supporting small business owners. It’s one to watch in case one of the recipients ends up being a nonprofit in your area that can help your business grow. - Verizon Small Business Digital Ready
The latest round of Verizon’s $10,000 small business grants just launched. Unlock free opportunities to grow your business and apply for a $10,000 grant. Even if you don’t secure a grant, joining Digital Ready is a smart investment in your future. The real value of Verizon Small Business Digital Ready lies in the tools and resources the program provides small businesses so they can thrive in today’s digital economy. Applying is free and easy, but if you have not yet joined the program (also free and easy), you can do that here.
Other grant options
The grant programs on this list offer some of the largest sums available to the general population of small businesses. Of course, there are many other grant programs available at the corporate and federal level. You may also find grants that are state specific, or grants for women-owned, or minority-owned, businesses. For more information about the “free money” available to you, check out this running list of verified grants available to small businesses.
