Government assistance for entrepreneurs is available to organizations, institutions, and industries for targeted projects and programs. If you work in a certain industry and can demonstrate that your business can benefit the larger community, you have a good shot at winning a government grant.
For beginners who are researching government grants and small business loans, creditworthiness is another important factor in acquiring financial support. If you're new to applying for government grants and loans, understanding what these agencies are looking for will maximize your odds of success.
What are government grants?
A government grant is money given out by local, state or federal government agencies. Unlike a small business loan that has to be repaid, government grants are typically given as a gift without any expectation of payment.
These grants are given to people and organizations with ideas, products, or resources that could be beneficial to their area or country. Financial assistance or grants from the government tend to be reserved for nonprofits, social services, educational endeavors and specified research.
Fundamentals of government grants for small businesses
A small business must follow certain rules and procedures to qualify for government assistance. There are also deadlines and timeframes that govern how and when the funds are disbursed. When applying for a grant, you must follow the procedures outlined by the agency in question.
Where to find government assistance
The process of obtaining a government grant for small business startups requires a clear understanding of what projects the government is interested in funding. Locating tools and resources to operate your business is a good starting place to find funding from government grants.
The Small Business Administration (SBA) provides a checklist to help you apply for business financing. MoreBusiness.com helps entrepreneurs access a list of resource materials and other helpful advice for starting and growing a business with government assistance. [If you are looking for a non-government grant, check out this list of grants for small businesses.]
Matching government grants for entrepreneurship
Grants, loans and contracts serve a specific purpose for doing business on behalf of the government. So, to receive a government grant, you need to make sure the objectives of your small business align with governmental interests. Prepare documentation that shows how you can help the government achieve its intended outcomes utilizing entrepreneur assistance.
Bplans.com gives insightful information about the process for government assistance for entrepreneurs, beginners, and a broad range of small business owners.
Government organizations that support entrepreneurs
In case you're wondering if there are government organizations that provide support to entrepreneurs, the answer is yes! Here is a list of government organizations that support entrepreneurs:
- SCORE: SCORE is an organization of retired executives who help up-and-coming entrepreneurs. A nonprofit funded by an SBA grant, SCORE is revered among entrepreneurs for the free information and resources it offers. Providing each entrepreneur with a seasoned consultant free of charge, SCORE allows entrepreneurs to receive specific guidance and resources based on their unique goals and circumstances.
- SBDCs: Small Business Development Centers are partially funded by the SBA, and they also collaborate with state governments and universities. Unlike SCORE, they typically charge a small fee for their services. While they can help businesses in various ways, they specialize in helping them acquire financing, get government contract work and write business plans.
- MBDA centers: Minority Business Development Agency centers are often located in major metropolitan cities and most commonly funded by the U.S. Department of Commerce. This organization focuses on minority business owners and typically charges a nominal hourly fee for its services. [Read related article: Grants for Minority Business Owners]
- SBA Guaranteed Loan Program: The SBA Guaranteed Loan Program helps small businesses by guaranteeing or securing small business loans. This allows lenders to get up to a 90% guarantee on the loans they make to small businesses. This is great for both banks and small business owners, and it offers an incentive for these banks to provide loans to certain small businesses.
- Women-Owned Small Business Federal Contracting Program: The federal government aims to award at least 5% of its annual contracting dollars to women-owned businesses. Your business must be at least 51% owned and controlled by women to qualify for this SBA program. Participants receive federal contracts and access to credit and capital.
- Small Business Innovation Research program: The SBIR program encourages small businesses to engage in research and development for federal agencies. The competitive grant program is overseen by the SBA and available to for-profit companies with at least 500 employees.
- Service-Disabled Veteran-Owned Small Business program: In addition to supporting women-owned businesses, the federal government aims to award 3% of all federal contracting dollars to service-disabled veteran-owned businesses each year. This program is also run by the SBA and available to businesses that are at least 51% owned and controlled by a service-disabled veteran. This individual must be an active participant in the day-to-day and long-term decisions for the business.
- Small Business Technology Transfer program: STTR is another program that offers funding opportunities for research and development for federal agencies. This program is similar to the SBIR program but requires participants to collaborate with a nonprofit research organization during the early stages of the project.
Tips for applying for government grants
If you find a government agency that supports entrepreneurs like you and are interested in applying for a grant, you need to follow certain steps. Here are four tips to maximize your chances of success:
- Act quickly. Grants usually operate on a first-come, first-serve basis, so when an opportunity presents itself, you need to be prepared to act quickly. You can monitor upcoming opportunities by staying in contact with grant coordinators and setting up Google alerts.
- Make sure you fit the criteria. Each grant has specific standards for qualification. This may be based on the size, ownership or type of business you run. To avoid wasting your time and the coordinators' time, make sure you meet the criteria 100% before applying.
- Call the grant administration. If any of the eligibility requirements are unclear, call the grant administration with your questions. They can tell you whether you are a good fit for the grant.
- Align your application with the provider's priorities. Given that every grant has strategic goals and priorities, ensure your business or idea is in line with the grant organization's goals, and emphasize those concepts in your application.