Business Grants Are 'Just Not That Simple': Here Are 5 Tips To Help

However, locating one might feel as pointless as looking for buried treasure.

"Everyone wants to know: How can I get free money for my business?" says Jenn Steinfeld, director of entrepreneurship and economic development at the National League of Cities, a non-profit that helps local government officials around the country. "And my response is: It's just not that simple."

That doesn't mean small-business grants aren't worthwhile to pursue — as long as you keep your expectations in check. Here are five things to keep in mind while you search.

1. Plan Ahead Of Time

Grant competition application deadlines might be tight. Prepare ahead of time so that you can capitalize on favorable possibilities.

Niche Snowboards, headquartered in Salt Lake City, has been in business since 2009, but the company's executives had never filed for a grant before learning about the FedEx Small Business Grant Contest only four days before the deadline. However, they had previously spent time and money on a solid goal statement as well as marketing materials such as images and videos, which helped them put everything together on time.

"We had all of the basic components," Ana Van Pelt, creative director at Niche Snowboards, explains. "All we had to do was bring them all together for this grant."

In 2022, the firm earned one of the three $50,000 grand awards. It intends to utilize the funding to create an upcycling program for production waste and to increase marketing spending.

FedEx judges look at a company's website, social media accounts, sustainability initiatives, and whether it would be a good mentor to other small companies when considering award applications, according to Kelli Martin, who manages the company's grant program.

"You should have answered these questions anyway," Van Pelt argues.

2. Recognize Characteristics And Requirements

As part of community regeneration or economic development projects, local governments may award company incentives. Facade grants and commercial corridor grants, for example, provide funds to assist you with updating items such as your storefront and signs.

Local grant competitions may have smaller application pools than national grant competitions. However, they may be matching grants, which require you to spend some money on the initiative yourself. They may even target specific streets or population areas.

Local government business incentives, according to Steinfeld, "have a lot of conditions attached." "There will be a lot of data that [company owners] would have to provide because that city will have to report back on how all that money was spent."

3. Look In The Appropriate Spots

A government grant is generally not a suitable fit if it does not finance a goal that is already in your company strategy.

However, if one does occur, you must ensure that you are aware of it. Sign up for email newsletters, go to networking events, and think about working with a local business mentor to find out when these chances come up.

"Find your county website, find your city website, speak with [your community's] economic development experts... or even attend community or government activities," adds Raj Tumber, a small-business coaching group SCORE mentor in Las Vegas.

Contact your local business development agencies as well. These organizations may hold pitch competitions in which company entrepreneurs can try to persuade investors to invest in their ideas. Grant funds or in-kind resources such as business coaching and office space may be awarded to the winners.

According to Steinfeld, business incubator programs are "the only location I know of" that provides actual starting business funding.

4. Be Wary Of Scams.

Be wary of groups that seek money in exchange for submitting your company to award competitions. They might be deceptive.

"Anyone seeking a beginning company grant should be aware that there are many grant frauds," Tumber warns.

Tumber suggests Grants.gov, a website that details available federal government business grants, as a reliable information source. You'll also discover grant-writing tips and information on how to report suspected grant fraud.

5. Look At Alternative Financing Sources As Well.

Don't rely only on grant financing to advance your company. If you're fortunate enough to receive a grant, it can help expedite your growth, but it shouldn't be the driving force.

For beginning and growth finance, Niche Snowboards' executives, for example, looked to friends, family, and small-business loans. They also utilize a company credit card to fill cash flow shortfalls. Steinfeld also suggests establishing contact with a local bank.

"They have a lot more underwriting freedom than you'd believe... because they understand what you're doing and are involved in you as a business owner," she adds.

Obtaining a business grant is an exciting experience. But, like with so many aspects of running a business, it is far from simple. Out of approximately 18,000 submissions, Niche Snowboards was one of just ten winners.

"[Winning] moved us to tears," Van Pelt adds. "Because, as most small-company owners are aware, finance — and the nature of small business in general — is tough."