We’ve all seen the commercials that claim there are millions of dollars in free money just waiting to be taken in the form of grants. But that money isn’t just floating in the air waiting for someone to reach up and grab it. You need to know where to look and how to apply for a business grant to see any of this “free money.”
Grants are available from a multitude of sources. The most well-known grants are government grants. Many people mistakenly believe these grants are at anyone’s disposal. This is not true. The majority of government grants are given to programs and institutions who then award the money to businesses and organizations that apply for a business grant. So the money comes from the government, but not straight to your business.
How to find government grants
If you are unsure what kind of government grants would best suit your business, start writing. Create a list of your business’s needs, interests and the goals you want to achieve through your grant. This will help you streamline your ideas to fit a niche. The more concentrated project you can come up with when you apply for a business grant, the more likely you grant application will be accepted.
Once you have a list of your business’s interests, find state and federal agencies that share those interests. A lot of government grants focus on economical, environmental and technological issues. Business proposals that utilize these areas are seen as more viable options because they can benefit more people. Don’t embellish your proposal, however. If you do not intend to “go green” and be environmentally friendly with your project, don’t tout your business as being environmentally conscious. Lies or inaccuracies can void your grant and you can be forced to repay and funds you have received.
The most common form of government grants is a research and development grant. These grants are awarded for projects and ideas that improve or revolutionize commercialization. Research and development grant programs available for small businesses have federal guidelines that must be met during every step of the project. In most cases, these grants are awarded through the Small Business Innovation Research and the Small Business Technology Transfer programs. The SBIR and SBTT programs are comprised of three phases. The first phase awards funding for the exploration of the idea or project. During the second phase, businesses use additional awarded funding to expand results. And phase three implements the idea or project into the marketplace (funding is not provided in phase three).
Research and development grants encourage partnerships between organizations, businesses and institutions. Typically one side of the partnership is responsible for a larger percentage of the work and results achieved during the grant. However, it is not typically specified how much a partner should or can invest. So, while your business may be the primary partner, teaming up with a university or hospital willing to provide funding can be extremely beneficial. When you apply for a business grant, the awarding panel will want to know your business’s plan for funding during and after the the grant’s duration. Expecting a single grant to fully fund your business venture is not a sustainable reality.
So, the commercials are partly true – there is a wealth of funding available in government grants if you know how and where to find it.