Oh, the things you could do with free funding for your small business! And thousands of those opportunities are out there1 – like fish in the sea. Landing one of those fish requires dedication, preparation, and hard work, but with a prize like free funding for your business on the line, who would expect anything less?
To be absolutely clear, we're talking about small business grants rather than loans here. Unlike a loan, repayment is not required, and you'll likely be working with an agency or non-profit rather than a lender. So how does this work?
Step 1: Research
Grant opportunities for small businesses are offered by a wide variety of sources, including federal, state, and local agencies as well as non-profit organizations. Most have highly specific and unique qualifications and requirements, and while some are aggregated into databases you can query, there is no single authoritative source for grant opportunities.
As you do your research, consider creating a spreadsheet to group and track the opportunities of greatest interest. Key fields of interest will include grant amounts, requirements, submission dates, grantor information, and more. Here's a brief list of links to kickstart your research:
Step 2: Choose your opportunities
And rank them. If possible, research how many people applied to each the last time they were offered, and compare that to the number of awards. If the competition is stiff compared to the award amount, you may want to decrease their priority. Add another layer to your research by getting to know more about the grantor, their organizational goals, and selection process.
Step 3: Prepare your application
Once your selection research is complete, it's time to apply. Keep in mind that:
- Your business plan is often a critical element. Review (or create) your plan with a focus on quality and clarity versus quantity. Online templates and examples can help here, and a clean, well-prepared business plan can help you stand out in a sea of applicants.
- Grant proposal writing is itself an industry, and you can hire a grant writer to help a) shoulder the workload, and b) increase your chances if you feel the benefits justify the cost.
- Your proposal will need to convey why your business deserves the grant, how the money will be used, estimates of the results you expect, the skills of those running the company, etc.
Step 4: Triple check and… submit!
You've invested a lot of effort, so be sure your submission is well polished. Errors, indirect answers, unanticipated needs, unclear formatting - all may reduce your chances of winning.
Step 5: Follow up
Use your research spreadsheet to track results. Add columns for known decision dates and grantor contact information. Don't be shy about reaching out to grant offices with polite inquiries and offers to address questions or concerns.
Those are the high points. Best of luck! Enlisting the help of your financial professional is another place where you should not be shy. If they can provide support before, during, or after your grant application, be sure to reach out for assistance.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
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