Guide to Small Business Grants

There's good news and bad news about small business grants. Good news: Entrepreneurs can sometimes obtain grants for their companies — and, unlike loans, grants don't have to be repaid. Bad news: Most grants are limited to applicants meeting highly specific qualifications in terms of background, location, industry and other factors. The U.S. Small Business Administration offers no direct funding to businesses; instead, it supports numerous other organizations, some of which offer financial assistance. Grants from those other sources may be available to small businesses that are:

1. Owned by women, minorities, veterans or people with disabilities.
2. Located in communities targeted for economic revival.
3. Qualified to conduct needed research or undertake other specific projects.
4. In need of training, technical assistance or other specific services.

Action Steps
The best contacts and resources to help you get it done

Start with the SBA

While the SBA doesn't actually give grants, it does track small-business opportunities provided by other agencies ranging from the U.S. Department of Justice to the National Park Service. Note: Many involve grants of training or other services rather than cash.

I recommend: The SBA's Federal Grant Resources portal lists grants that may be available to small businesses; from there, you can link to other agencies' sites for more details.

Get the big picture

The U.S. General Services Administration also lists federal grants and other giveaways available to small businesses. Search or browse its online catalog by category (including newest opportunities and those available to women, minorities and other groups), then contact sponsoring agencies for details.

I recommend: The GSA's Catalog of Federal Domestic Assistance (CDFA) has listings and tips on applying for government assistance.

Think creatively

Even if you can't find a grant specifically designed to expand your company, you may find one that accomplishes the same goal by funding a project in your area of expertise. Example: The U.S. Department of Agriculture offers small-business grants for research into "problems facing American agriculture" in areas ranging from nutrition to marketing.

I recommend: Browse or search the listings at Grants.gov. The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) programs also award project-oriented grants, primarily for high-tech initiatives.

Look close to home

State governments sometimes offer grants and frequently provide other small-business assistance, such as advice, networking opportunities and training. Local economic-development agencies may also offer help, especially in areas targeted for redevelopment.

I recommend: About.com lists Web sites for all state commerce offices; many such state sites provide links to community economic-development groups.

Contact a Small Business Development Center

This network of agencies, a public-private partnership, offers free advice and other services. SBDC staffers may be able to steer you toward applicable state, regional and local agencies offering small-business grants, advice and services.

I recommend: Find the SBDC branch nearest you.

Prepare a grant proposal

Writing a grant proposal isn't rocket science - but it does have to be done correctly. You can outsource your effort, or you can do it yourself.

I recommend: Federal Grants Wire offers expert step-by-step advice for researching and writing a grant proposal. The Catalog of Federal Domestic Assistance (CFDA) also offers proposal-writing instructions.

Tips & Tactics
Helpful advice for making the most of this Guide

• Keep tabs on grant-awarding groups. They constantly add, delete and modify their offerings.
• Remember that, rather than offering cash, many grant programs offer training, technical assistance and other potentially valuable services.
• Read requirements carefully. Grants designed for high-tech start-ups in New Hampshire won't be awarded to retailers in New York.
• Apply as a business, even if you're a sole proprietor. Applying as an individual may disqualify you from opportunities earmarked for businesses.
• Be wary of companies offering to research grants for a fee. While some are legitimate, others just charge you for the same online searches that you can easily do yourself. If you do hire one, find out exactly what it's providing.

The official source of Small Business Grants is the US Government Grants page at Business.com