Struggling with your business? Looking for help with the funding? Take help from your government for free or with 50% of the repayable amount. Sounds surreal? It’s not. You can get a grant from your government for this very purpose. By providing grants, the US government takes care of the economy by helping small businesses to initiate and grow. Small businesses contribute a lot to the economy which as a result brings benefits to the masses. Government grants, though, are free but at the same time extremely difficult to get. If you are an owner of a small scale business you would face a lot difficulties in order to qualifying for one. However, what’s the harm in trying? There are many grants that you can consider and apply for. Below is a step by step guide to secure a grant.
Government grants are awarded on three levels: local, state and federal. Local grants, generally, are of small value which may help cater specific needs of a business for example marketing, inventory and renovation needs. There are different grant programs that exist locally, you can contact your local government for further information on those grants.
State grants are available to help expand your business. By means of state grants government funds businesses to get them to the international market. It brings in more business by means of demand by foreign clients in addition to the demand by the local economy. This eventually brings about desirable improvement in the economy as it brings in foreign currency which can provide a whole new room for growth and expansion. It may help you fund the advertisements to pitch your product from local to international market.
Federal grants are for larger scale businesses that include research and developmental programs.
We will focus more on the state level grants as it is most desirable by start-ups. There are three further types of business grants in this category that you can opt for: direct grants, equity finance and soft loans.
Direct grants are provided to cover up the basic needs of your business, for example: equipment, furniture and other essentials. You have to pay back 50% of the direct grant you acquired. Equity financing is a mode of funding where the business that does not particularly qualify for a grant. It is not a mode of loan instead a share of ownership. By means of equity financing money is raised for business by means of offering share in the ownership of business. It helps raise capital for the business. Lastly, you have the soft loans. These loans act as good relief as these loans are issued on a comparatively lower interest rate and are available easily as well.
How to apply for grants?
All grants offer different mode of financing and have different requirements. Some grants are very specific and are granted to people with specific profiles. You can use the following tips to get the grant you need.
- Communicate with the institution providing the grant.
You must talk to the officials about your business and the application process so they might be able to help you out with a flawless application.
- Read the details of the grant you are going for. Make sure you carefully read all the objectives. This saves you from the discomfort later of finding out that this grant is not specific to your business needs. See what the grant offers and appeal to its goal through your application. The more you address this the likelier it’s for your application to be accepted.
- Plan your application exceptionally well. Your application will determine whether you get the grant or not. It should be well planned and well executed. You should be able to convince the officials that you are the most deserving candidate and that your business can flourish with the help of the grant. You can use this template to prepare your application:
- Write a summary/ abstract
- Introduce yourself and your business
- Tell them why you need that grant.
- List business objectives
- List your strategy for utilizing the grant
- Evaluation of future of the business
- Make Financial Projections
- Review your application multiple times to identify mistakes and edit it to perfection.
- Make sure all your documents are attached.
- Keep an eye out for grant schemes. Be the early bird and apply as soon as the scheme is launched.
If you don’t qualify for grants here are other options for your consideration.
- Small business lending fund- it provides customers with small loans that are given by specific lenders in different states.
- Economic development agencies – these are locally based and local governments have them for each state.
- National association for self-employed. These can help with loans and grants to individuals who are self-employed.
Try your best and don’t lose hope. Where there is a will there is a way. You need to stay adamant. If you don’t qualify for the grants go for other alternatives. If even those don’t work out, try different financial service providers such as crowd funding. Crowd funding essentially means that you can go through different crowd funding websites and put up a campaign and people may help you with the finances. Similarly, you can go for bootstrapping, that means stretching your hands over to any possible option. This includes asking friends and family for loans. Don’t shy away from taking their help, you can pay them back when your business starts generating profits.
It is understandable that opening a new business and getting loans for it can be overwhelming. Don’t be intimidated by it. Look for all the options, weigh the pros and cons and finally choose the one that fits your needs. Good luck with your dream, it will surely come true.