Small businesses need all the help they can get, and this is particularly true for first-time entrepreneurs who are just experiencing the market.
Running a business is no easy task, and you’re undoubtedly going to make several mistakes along the way, and while these blunders may be minor, they can have a severe impact on your business’s financial stability.
This is exactly why so many small businesses fail within the first year, and keeping things in check for extended periods of time will require your undivided attention.
Growing your business requires a fair amount of money, and unless you’ve absolutely cornered a niche market, you’re going to need some help in the early stages.
The government offers a number of different grants to small business owners, and we’ve put together a list of some of the best options for first-time entrepreneurs.
How does it work
Small business grants are something like a gift the government hands out to promising businesses in order to help them grow into giant corporations one day.
Because of this, any money that a business receives through these grants never has to be paid back, so long as the involved parties respect the terms of the agreement.
That being said, some of these grants are still taxable, and you should consult with your financial advisor before applying for one.
Eligibility for government grants is tough to achieve, but if you do, you’ll be given access to sufficient financial resources to completely build your business from the ground up, ranging from your brand to your overall modus operandi.
For the most part, these grants are given out because it’s beneficial for the government if your business succeeds, as the tax revenue from a single large business is much more impactful than that of dozens of smaller businesses.
Grants vs Loans
While several granting options are already available, you may also want to look into government loans.
Oftentimes, a government loan will allow you to take out a much greater amount of money than you’d be able to get with a grant, and if your business succeeds, paying the loan back should be a non-issue.
Of course, this implies you’ve already got a solid plan laid out for how you want to expand your business and how you’re going to adjust your operations to this growth.
When doing this, you should also account for the loan as well as the interest rate on it, meaning that you’ll have to generate enough revenue to pay the loan back in due time while retaining profitability.
This takes a lot of work, but in a niche market, it’s a piece of cake, especially if it’s a market you pioneered with your business.
The options
Grants.gov was created by the Department of Health and Human Resources all the way back in 2002, and it’s currently managed by the Office of Management and Budget.
The award amount varies from business to business, and you’ll have to research the official website to learn more about the types of grants they have to offer.
One benefit of Grants.gov is that it allows you to check your eligibility for numerous federal grant programs before applying while also assisting you through the application process.
On the other hand, the Small Business Innovation Research Program hands out grants to small businesses in the research and development industry.
This way, the government can directly influence and support innovation in the scientific and technology sectors.
SBIR offers up to $250k for their Phase 1 applicant whereas this amount can go up to $750k for Phase 2 applicants, although this is only available to businesses that successfully expanded with a Phase 1 grant.
Some tips for first-time grant applicants
Even though some of the nationwide grants may seem tempting due to the vast amounts of money they offer, getting into the smaller pool can be pretty difficult.
Instead, you should look for any smaller grants that your city or state has to offer, and while these may pale in comparison to some of the grants offered in the entire US, they’re a good starting point for any small business.
Work your way up from there and slowly expand your operations until you’re certain that countless hours of preparation for a nationwide grant will pay off.
A good thing to do is to research which businesses won these grants previously and carefully examine their strategy, as it could give you an edge on the competition when applying.
Bottom line
Expanding your small business can be pretty costly, and if you fail to make it work, you could suffer severe losses in the early stages.
Because of this, government grants for small businesses were made, helping first-time and experienced entrepreneurs bridge the gap and grow their businesses from the ground up.
Due to it being a grant, this money doesn’t have to be paid back, and all that’s left to worry about is retaining profitability as your business outgrows its initial constraints.