Small Business Development Centers
Once youve exhausted your searches for grants from federal agencies, the next stop on your list should be local and state business grants. You may be able to hit paydirt and find some of these on your own, but theres a free, local resource that may help.
Small Business Development Centers are a business owners best friend. Local, regional, state, and national offices mentor small business owners and help them understand business financing options, craft marketing strategies, and connect to other local business owners .
One thing they can help with is navigating the grant process. Very few people have as much visibility as SBDC advisors do on the local business grant scene. Its the one appointment you cant afford not to make when searching for small business grants.
The Cons Of Small Business Grants
Unfortunately, there are a number of cons associated with small business grants.
Because grants are essentially free money, there are many hidden âcostsâ associated with themâincluding your time. Typically, grant applications require a lot of paperwork. In addition to the application, you and your small business will also have to provide additional documentation such as demographics of your market, your product or service and your specific reasons for applying for the grant.
In your application, you will be required to show specifically and with great attention to detail how you will use the grant funds, should they be awarded to you. This may involve charts, graphs, budget numbers, market demographics, and projection sheets that will paint a picture of your intentions. This is time-consuming and often requires many hours of research, planning and organizing. Since grants are essentially free money, the issuer may require you to show how your small or online business will use the grantmoney to benefit the society at large.
After all the time you spend on the application process, be prepared to wait even longer for the response. It takes weeks and sometimes months to find out if youâve been approved or not for a smallbusiness grant. This can be very frustrating, especially if you, as the small business owner, are in need of the funds quickly.
Texas Workforce Training Grants
The Texas Workforce Commission offers the Skills for Small Business grant. This supports businesses with fewer than 100 employees and incentivizes training for new, full-time workers. Support is also available to upgrade the skills of existing full-time workers. Training is provided through community or technical colleges, or the Texas Engineering Extension Service .
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Orlando Downtown Commercial And Residential Building Improvement Program
This Orlando program provides business grants between $15,000 and $120,000 for organizations that make improvements to buildings within the downtown Orlando Community Redevelopment Agency boundaries. This program encourages the reuse of vacant or underutilized properties and hopes to improve the appearance and support the long-term viability of downtown Orlando.
Association For Enterprise Opportunity
Fiserv US 2021 – Back2Business Grant
In partnership with AEO, the Fiserv + Clover Back2Business Grant Program will award grants of $10,000 to eligible Black- and minority-owned small businesses that have been impacted by COVID-19 and the resulting recession.
Area served: District of Columbia, Illinois, Maryland, Oklahoma, Texas, Virginia Audience: Small Business Owners
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A Canada Small Business Financing Loan Is Commonly Used For:
- New businesses looking for financial support to start or grow a company
- Established businesses experiencing issues with cash flow as a result of a large investment
Not sure if this product is right for your business?
85% of the loan is guaranteed by the Federal government.
Previous Purchases Are Eligible
Purchases made within the past six months are eligible for financing.
Repayment Options That Work for You
- Floating rate principal plus interest
- Floating rate principal including interest
- Fixed rate principal plus interest rate
- Fixed rate principal including interest
Terms That Meet Your Needs
- Equipment loans up to a 10-year amortization
- Leasehold improvements up to a 7-year amortization
- Real property loans/ immovable up to 15-year amortization
Canada Small Business Financing Program
On June 30, 2021, the coming into force of legislative changes to the Canada Small Business Financing Program removed the restriction excluding not-for-profit, charitable and religious enterprises as eligible borrowers. for more information.
The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders. Loans can be used to finance the following costs:
- purchase or improvement of land or buildings used for commercial purposes
- purchase or improvement of new or used equipment
- purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant
Up to a maximum of $1,000,000 for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.
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Good For: R& d Companies
The DoD offers grants to small businesses through the STTR program and a number of other initiatives, like the Defense Enterprise Science Initiative. The Office of Naval Research, the Air Force Office, and the U.S. Army Research Institute are all looking for research and development of technology that will help them reach their goals.
What Is A Small Business Grant
A small business grant is essentially free money given to a small business owner to help them launch, develop or expand their organization. Grants, unlike a loan, do not have to be paid back, but they often come with restrictions on how the money can be spent.
Just because a grant is free money, doesn’t mean it is easy to get. It takes a lot of time and preparation to apply for a grant, and they are highly competitive, so small businesses should only apply for grants they are eligible for.
Entrepreneurs and small business owners can seek a variety of grants, like private grants from corporations and government grants from federal, state, and local governments. Grants are also available for specific industries and demographics for example, if you are a minority business owner, there are several minority-owned business grants specifically geared toward you.
Key takeaway: Small business grants are free money given to small businesses by private corporations or federal, state, or local government.
Editor’s note: Looking for the right loan for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
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Trudeau Announces 75 Percent Wage Subsidies Interest
On Friday, Prime Minister Justin Trudeau announced that the federal government will now be providing 75 percent employees wage subsidies for qualifying small-and-medium-sized enterprises .
Our hope is that employers being pushed to layoff people because of COVID-19 will think again.
Trudeau stated that the goal is to help companies keep employees on the payroll and expressed hope that companies that have already made decisions to layoff people, will reconsider. Our hope is that employers being pushed to layoff people because of COVID-19 will think again, he said.
The 75 percent wage subsidy will be available for qualifying businesses for up to three months and will be retroactive until March 15.
On Monday, Trudeau shared more promised detail on the initiative, noting Canadian businesses that have experienced a 30 percent decline in revenue due to COVID-19 will be eligible for the 75 percent wage subsidy.
The program applies to all Canadian businesses, both large and small, as well as nonprofits and charities. There is no restriction on the numbers of employees. The 75 percent wage subsidy will be available on the first $58,700 of an employees salary, with Trudeau stating this means up to $874 per week through the government for individual Canadians.
The percentage of startups that don’t have clean enough books to be able to show this 30% drop, even if they have experienced it, is surely a factor to consider.
Local Small Business Grants
In addition to statewide government grants, cities, towns, and nonprofits finance their own small business grant programs. Continuing the trend, these usually carry smaller payloads but less competition. For local small business grants, youâve got a substantial upper hand if you serve your community in a tangible and demonstrable way.
Plus, is your small business aimed at promoting health, environmental consciousness, or similar initiatives? If so, youâll be looking at even more local grants to apply forâand get funding for your eco-friendly business. Because local small business grants are so geographically specific, weâve pulled just a few to show you what kinds of opportunities may exist in your nearby city or town. Again, make sure to look for similar programs in your own locality.
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Natural Resource Sales Assistance Program
In addition to the billions of dollars spent purchasing goods and services, the federal government also sells large amounts of natural resources and surplus property. The SBA Natural Resource Sales Assistance Program sets aside a percentage of these goods for bidding by small businesses only. In addition, federal agencies sometimes divide surplus materials into smaller parcels, making it easier for small businesses to purchase. The five categories are:
- Timber and related forest products.
- Strategic materials.
- Leases involving rights to minerals, coil, oil and gas.
- Surplus real and personal property.
The program also provides training for small businesses on government sales and leasing.
Pradhan Mantri Mudra Yojana
- The scheme will extend loans to activities that create employment and generate income in the areas of services, manufacturing, retail, and agriculture.
- No collateral or security need to be provided to avail the Mudra loan.
- Three types of loans can be availed under Mudra for different stages of the business, namely, Shishu, Kishor, and Tarun.
- The loans under the Mudra Yojana will be extended by public sector banks, private sector banks, cooperative banks, Regional Rural Banks , foreign banks, Non-Banking Financial Companies , and Micro Finance Institutions .
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For Example You Can Use A Loan To Finance:
- commercial vehicles
- computer or telecommunications equipment and software
- production equipment
Interest rates are determined by your financial institution and may be variable or fixed.
- Variable: The maximum chargeable is the lender’s prime lending rate plus 3%.
- Fixed: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.
A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan.
Small Business Grants: How To Get Funding In 2021
The federal government, state government and even private entities, like corporations and foundations, offer grants to small businesses. There are additional grants available for small businesses owned by women, people of color and veterans.
Unlike loans, grants are considered “free money” because they dont typically need to be repaid.
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State Government Grants For Small Business
State-level small business grants are generally geared toward that particular stateâs social or economic concerns. Theyâre meant to work in tandem with federal or other state grants, so youâll usually get less funding. That said, theyâre much more accessible due to lower competition. Also, many are matching grants: Instead of just providing the funds for you to use for a certain purpose, some will require that you match the money they give as well.
You can search for business grants in your own state and industry by looking at your states department of commerce website or grants portal. Below, we list some popular state grant programs and resources.
Also, an important note: While weâre listing state-specific government grants for small businesses, many of these run across multiple states, so donât give up if the grant looks right but your states donât match.
Business Grants Vs Business Loans
Small business grants have one major advantage over business loans: You dont have to pay back a grant. A loan, on the other hand, has to be paid back with interest, which can be tough on new businesses and businesses with cash flow struggles. However, qualifying for a small business grant is also tough, so you may need to explore more traditional small business financing options that can work for you.
Two business loan options to consider if you cant qualify for a grant funding for your small business are microloans and SBA loans.
Microloans are loans under $50,000, and usually have low eligibility requirements and reasonable interest rates. Many of the same organizations that provide grants, such as nonprofits and government organizations, also provide microloans. So, if you dont qualify for a small business grant, we suggest asking the organization if they provide loans.
SBA loans are another alternative if youre unable to qualify for a grant. The federal government guarantees SBA loans and works with banks to get these loans in the hands of small business owners. Because of this, SBA loans have low interest rates, long repayment terms, and larger capital amounts. You can approach your local bank and see if they provide SBA loans, or you can apply for an SBA loan through Fundera.
See Your Business Loan Options
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What Can You Do If Youre Denied A Small Business Loan
There are a number of steps you can take if youâre denied a small business loan. First, try to find out why your application was denied. If your SBA loan application is denied, youâre entitled to a notice of denial that details the reasons you may receive this directly from the SBA or from your lender.
If, instead, you are denied a small business loan through an online lender or other financial institution, contact them to find out why you were not approved. They may be able to provide insight into how to improve your future approval odds.
Once you know why your loan application was rejected, take steps to rectify the underlying issues. For example, you may need to improve your credit score, establish more consistent sales or reassess the amount you need to borrow.
What To Know Before You Apply
The grant application process can take some time, however, some things can help speed the process up. One of these is having a single document listing all of the common questions you might get on a grant application. Writing these answers out ahead of time can make applying for grants much easier because you can copy and paste your answers into the application. Include the following in your document:
- Your capital plan. Whether youre a startup or an established company, what other methods will you use to fund your business? Options include crowdfunding, angel rounds, loans, seed rounds, et al.
- Business model. What type of business are you? Examples include e-commerce, subscription model, SaaS and membership.
- Revenue streams. Make a spreadsheet of your products, the cost of goods sold, retail price, the number you must sell to break even and your gross margin.
- Business pitch. This is your 15-second elevator pitch. Consider the problems your company solves, who your audience is and how you will use the proceeds of your grant. Another critical component of your answer is how you, the business owner, are uniquely qualified to solve this problem for your customer.
- Your small business brand. Include your social media accounts, logo and a video about your company. Your social media accounts should reflect your small businesss desired aesthetic.
- Target audience. Who does your small business sell to? What does an ideal client look like?
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Who Can Get A Grant
The federal government awards grants to organizations including:
State and local governments
The intent of most grants is to fund projects that will benefit specific parts of the population or the community as a whole. What you might see about grants online or in the media may not be true. The federal government does not offer grants or free money to individuals to start a business or cover personal expenses. For personal financial assistance, the government offers federal benefit programs. These programs help individuals and families become financially self-sufficient or lower their expenses.
Southeast Colorado Enterprise Development Inc
SECED Business Loan Fund & Micro Loan
The BLF is an alternative financing method designed to help finance business projects that will positively impact the economic health of the communities within Baca, Bent, Crowley, Kiowa, Otero and Prowers counties. Individuals who meet eligibility requirements may apply.
Area served: Colorado Audience: Small Business Owners
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An Alternative: Quick Business Loans From Lendingkart
While all these schemes display the commitment of the past and present Indian governments to develop the nations economy, there is much that needs to be done to make the schemes effective. For example, the refinancing and subsidy model used by the government takes away the quick factor from unsecured business loans touted by the schemes.
Since these loans are essentially funded by government-sponsored banks, the turnaround time is in weeks or even months, which is detrimental for a small business owner looking for quick business finance. Even the most ambitious of all these schemes, the 59 Minutes Loan for MSMEs, takes up to 2 weeks in reality.
On the other hand, MSME finance by non-banking financial companies like Lendingkart is approved and disbursed within 72 hours. This is done by combining business analytics and online technologies for loan approval and disbursal instead of relying on paperwork and age-old processing techniques. For instance, Lendingkart offers business loans online through its website or mobile app.
Simply log in to apply for a business loan, get a same-day approval, accept the quote and upload your documents digitally for verification. The entire process hardly takes 10-minutes of your time and the verification is completed within 3 working days by Lendingkart. So, you have the funds ready for use within a quarter of the time it takes a government scheme to disburse a loan.