How to Apply for Grants to Start Your Business

Grants for your business are the cheapest form of financing available; in fact, they never need to be repaid. Therefore, any grant you can receive, no matter how small, will reduce the cost of starting your company. Since grants are such a good deal, though, they are extremely competitive. To secure free funding, you will need to be prepared for an exhaustive process.

Step #1 Have a Great Business Plan

Grant providers want to support businesses with a likely chance of success. Grants are not hand outs. They are investments in your business, just like any other loans, in the hopes the investment will generate rewards. The companies and communities that issue grants are not looking for financial reward, but they do want to see the money they spend impact the industry or community they provide the funding to. For example, if you are starting up a local after school art center, the company that issues your grant wants to know how you will run the business, if you understand the financial aspects of doing so, and why you think that business will succeed.

Step #2 Research Grants in your Area

You will have several options to start looking for grants. Federal grants come through many community initiatives including the Small Business Administration (SBA) and United States Department of Agriculture. These grants are typically extended in specific areas of the country, and they can be searched geographically. Your state and local governments may have similar plans. If you are working in a specific industry, such as green technology, you may be eligible for industry-based grants. Speak with your SBA office, Chamber of Commerce and Better Business Bureau for information available regarding both geographically based and industry-based grants.

Step #3 Prepare Grant Applications

Grant applications are lengthy and detailed. In fact, many companies hire grant writers to take this part off their hands. The application will be the sole criterion you are eventually judged on when it comes time to decide if you receive the funding. As a result, your grant should be prepared with attention to every aspect required. It will help to use your business plan as a source for many potential answers to grant questions. For example, a grant may ask why your business has a chance of success. This has been answered in any good business plan, and you can repeat the information on the grant. Repetition is not necessarily a bad thing; it is good to put forth a cohesive plan and vision.

Step #4 Know your Deadlines

Grants are limited, and they will go to the first business the board approves. For this reason, you should be certain to not only meet deadlines but get your application in as soon as possible. Those businesses who apply as soon as the grant opens may have a better chance at the funds. Once the grant deadline is approaching, limited resources will be available for remaining businesses who turn in their applications far later in the cycle. It may even be best to wait for the next year if you are nearly at a deadline.