Over the years there’s been a lot of misinformation circulating about the government’s role in small business grants.
For some reason most of us are led to believe that the government has almost unlimited funds available for starting up a small business and that if you meet certain criterion you will probably qualify for free money from the government.
Unfortunately, this isn’t true and has never been the case – information on government small business grants is available at the U.S. Small Business Administration (SBA) and facts about grants are fully explained on their website.
Government grants are made possible by our tax dollars and are appropriated by bills which are passed by Congress and then signed into law by the United State President.
Misconceptions
The United States does have Federal Grant programs available but these are generally not offered to the general public as they are usually for non-profit organizations that provide a public service. It may be possible to find government small business grants if you have a company that is currently in business and can provide specific documentation including three years’ tax returns and a detailed business plan.
However, these grants which may be available to companies that have a product or service that benefits society in some way and the company is a not-for-profit business. For example, small business grants may be available for non-profit organizations that provide meals for homeless individuals or families but a government grant would probably not be available for a small family owned restaurant.
One of the reasons why so many people misunderstand small business grants is because they are often confused with small business loans. A grant is funding which doesn’t need to be repaid whereas a small business loan must be repaid albeit at a low interest rate.
Who Is Eligible?
As is clearly evident, there are few, if any, small businesses that are eligible for small business grants offered by the government as there really isn’t any such thing.
The Small Business Administration that administers federally funded government grants would be the first place to look when trying to discover who is eligible for grants, but you will quickly see that only non-profit and educational organizations are generally eligible.
Eligibility for available small business grants depends on the organization who is offering the funding.
The SBA is not given authority to offer grants to small businesses. Many people find this odd as it is, after all, the Small Business Administration. Even so, they are not authorized to provide funds to small businesses but some state and local governments do have funding for small business grants but you will find that most grants are offered by foundations and organizations in the private sector.
Foundations Offering Small Business Grants
It is important to take the time to research foundations that offer small business grants in your industry or niche within that industry. There are small business grants awarded by foundations and other organizations within specific industries for small businesses that meet stringent criterion. For example:
The Skoll Foundation – Provides small business grants to entrepreneurs who promote change or balance in six key areas which include:
- Health
- Tolerance
- Environmental sustainability
- Peace and security
- Economic and social equity
- Institutional responsibility
The Rockefeller Foundation – Small business grants awarded to those companies and entrepreneurs who are looking to bring about social changes and benefits on a global level and to as many different populations or peoples as possible. Applications can be made through the Rockefeller website.
The National Science Foundation – Now here is one that actually is a government entity which can provide grants to old or new small businesses. This is accomplished through the Small Business Innovation Research & Small Business Technology Transfer program.
The main purpose of this fund is to promote cutting edge technology and scientific advancements through projects that will benefit the United States government. However, there is some funding available for small businesses that work with non-profit research organizations.
Applying for Small Business Grants
Keeping in mind that the Small Business Administration can fund certain charitable organizations but not small businesses, it would be a waste of valuable time and effort to make an application there.
You could read the guidelines on their website for further information, but unless you are a state or local government it would be of little benefit.
However, you can apply directly to any one of a number of foundations and organizations such as those listed above. Following is the contact information for each of those groups mentioned if you would like further information on how to submit an application:
The Skoll Foundation
250 University Avenue, Suite 200
Palo Alto, CA 94301
650-331-1031
skollfoundation.org
The Rockefeller Foundation
420 Fifth Ave
New York, NY 10018
212-869-8500
rockefellerfoundation.org
National Science Foundation
4201 Wilson Boulevard
Arlington, Virginia 22230
703-292-5111
nsf.gov
The easy part is filing an application. It is finding a foundation with the grant money available that is the tricky part. This is why it will take a bit of time and energy on your part to do the research. The more specific you can be with the type of small business you have or are looking to start, the easier your search will be.
Also, keep in mind that every organization that has small business grants available has different requirements to follow when applying. Some will only fund small businesses that have been operating for a certain number of years while others will fund start-up endeavors as well.
The other alternative to finding small business grants is to do an online search as there are some websites which have links to grants of varying types and sizes.
If you are willing to put forth some time and effort, there are small business grants available if you can match your needs with an organization who has funding in available in that specific area.
Keep at it and you may find the exact the grant you’re looking for – there is money out there, the key is persistence.
By: Bradley Barks
About Brad
Brad is our lead researcher and editor - he enjoys business, meditation, being active and always learning - his goal is to successfully help you research, find, secure, and enjoy grants and scholarships.
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