What Grants are Available for New Businesses?
If you’re in the process of getting a new business off the ground, you know better than anyone that money really does open doors. It can seem like everywhere you turn there’s a new expense when you’re just getting your business started. When you’re in need of cash to start your business, you need options. That’s why many startups look for grants to get their business going.
At The GrowWise Group, we work with business owners every day to help get new startups the funds they need to succeed. In this blog entry, we’ll talk about the types of grants available for new businesses and answer your questions about financing a business.
Understanding Small Business Grants
When you don’t have the funds you need for a smooth start, getting your business going can mean one headache after another. Small business grants are the holy grail of startups for a reason. On the surface, they seem like completely free money, making them the ultimate simple money fix for a new business.
Business loans have to be repaid and come with all kinds of details to worry about like financing terms and APR. Grants, on the other hand, can seem like an easy way to get your business going. But if you’re looking for an easy shortcut, it’s important to realize that grants are more than just free money with no strings attached
Expectations of Grant Recipients
New business owners are often surprised to learn that small business grants actually come with some fairly restrictive caveats. To begin with, you’re restricted on where you can spend the money from a grant. This means you may not be able to accomplish everything you originally planned for with the grant money.
Instead, you’re beholden to the grant donors and required to account for your grant money. Unlike a small business loan that can be used for anything, if your vision or plan changes, you’ll still be obligated to fulfill the grant requirements.
Qualifying for a Grant
For many small business owners, the restrictions of the grant are not a problem they’ll need to contend with. That’s because it can be incredibly difficult to qualify for a grant. Finding the right small business grant for your business, your goals, and your focus can be difficult. But it can be even more difficult to qualify for the grant you’re applying for. When it comes to qualifying for small business grants, the process can be as competitive as it is confusing, which is why it’s important to have other forms of financing on call.
Types of Grants
There are all kinds of grants available from many organizations. The goal of the organization is typically connected to the grant. Innovation grants are one of the most common in today’s market.
Minorities and other under-represented groups are one of the most common types of grant recipient. This includes veterans, disabled individuals, women, and racial or ethnic minorities, among others. Most grants include very strict eligibility standards. Locating a grant you’ll qualify for can be difficult and involve a good deal of research.
The Downside of Grant Application
If you’re looking for a cash infusion for your business, it may be worthwhile to consider grant application only after securing other funds. Here are a few reasons why:
1. You Have to Prove You’re Worth It.
You know what your business is capable of, but when you’re applying for a grant, you have to convince the people with the money that you’re worth the investment. That can mean supplying a complete picture of your market demographics, budget, and more.
2. Grants Can Be Costly in Terms of Time.
Although grants are free, they can end up costing you in the time investment you put in looking for the right one. Additionally, grant application typically requires an extensive amount of documentation for a grant you may not get. Once you’ve received your grant, you’ll need to gather and submit even more documentation to demonstrate your completion of the grant’s terms and use of funding. Many small business owners find this a stifling way to start a business.
3. The Competition is Stiff
It’s important to do your research and only apply for grants where you meet the strict eligibility requirements. But even when you do, be prepared to go up against dozens of other companies just like you with just as good of a case for grant money.
Get Help for Starting a Small Business Without the Hassle
Grants can be a great source of startup cash for the right small business. But they’re not for everyone. If you’re interested in securing the funds without enduring the fuss, consider alternatives that don’t make you jump through hoops.
At The GrowWise Group, our financial consultation professionals offer help for starting a small business from financial advice to startup loans for business. To start your business funding application, call us at 877-244-9809 or contact us online to discuss your financial needs and find out how we can help.