Because they are essentially free money, grants are a godsend to fledgling businesses. Although finding appropriate grants and qualifying for them isn’t easy, you never have to worry about repaying a grant or paying interest. Typically, the government reserves grants only for businesses deemed vital to the state or country overall. Read on to learn more about the grant application process and what kinds of companies currently receive grants.
Sources of Grants
Depending on your business plan and preparation, grants can come from any number of sources. Here are five sources you might consider:
- Local and state agencies. Our federal system is too overworked and underfunded to give grants to all startups, but subsidized financial assistance is essentially the same thing. For example, your local government might offer you a low-interest loan.
- Amber Grants. Ranging from just $500-$1,000, Amber grants began in 1988 as a way to help female entrepreneurs. While modest, such an amount can make the difference between staying at a financial impasse and getting going.
- Uncle Sam. If you meet certain criteria, the government might have specific grants that could help jump start your business. For example, if you manufacture “green” products or perform medical research, the feds just may be able to help you out.
- Like a local business. Occasionally, certain funders will run a contest to drive traffic. For instance, funders might run a competition for local small businesses to compete over a prize.
- Opportunity fund. Based in California, this nonprofit provides various microloans, commercial real estate findings, and microsavings to startups in the Bay Area. If you’re located somewhere else, try searching online or asking other business owners if they know of similar local programs.
Environmental Technology Grants
One week ago, the Arizona Commerce Authority gave two technology startups from Tucson, AZ the AZ Fast Grant. This grant is designed to assist small businesses in commercializing their technology innovation. This year’s winners, Grannus, LLC and YourLabs, will receive $5,000 in addition to receiving special training on how to market their product and qualify for grants at the federal level for tech startups. The Commerce Authority chose the companies because Grannus is dedicated to polygeneration power plants and efficient energy capture, while YourLabs is an e-learning software developer.
Arizona is not the only state with grant programs for green businesses. For example, in April, two businesses in Western New York received close to $250,000 in grants from the New York Power Authority to support agribusiness and eco-friendly manufacturing. One of those businesses, Eden Valley Growers, is a ten-member vegetable-farming co-op that got $80,000 to pay for energy-efficient coolers to help meet demand for locally grown produce. The other company, Living Green Insulation Products and Services, received almost $170,000 to renovate an old building to house its sustainable manufacturing production.
Fraud Detection Grant
Maryland made the distribution of grants interesting by sponsoring a state competition for startup funding. The winner, Red Owl Analytics, walked away with a $100,000 state grant. The company leveraged the grant to receive a large amount of private funding. Red Owl hopes to make major expansions with the grant. The tech startup monitors the electronic and financial transactions of businesses to look for digital footprints potentially indicative of fraud.
Federal and state agencies are also inclined to fund companies that offer products and services critical to national defense. For instance, Hawaii Small Business Innovation Research recently started a matching-grant program, which awarded almost $250,000 to four Hawaiian businesses last month. Specifically, Oceanit received $50,000 in matching grants to develop an ice-repellant coating technology for airplanes and a data-integrating software platform for retinal scanning. Likewise, Pacific Rim Defense received about $80,000 to develop integration software for the power-usage information of sea vessels.
When it comes to bankrolling your business, grants are hard to beat. They can be hard to get, but once you have them, their yours forever. You might be eligible for a grant based on the theme of your business or your personal demographics. Once you find a grant, get to work on a proposal that details the nature of your business. It’s a lot of work, but your startup will thank you.