How To Get Free Money – Forbes Advisor

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Small business grants provide free money to small businesses, startups and organizations alike. Businesses can use these funds to grow their business, recover from the pandemic or do work that benefits the public, among other purposes. However, finding available grants and applying can be time-consuming. We simplify the process here.

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What Is a Small Business Grant?

A small business grant is a sum of money awarded to a small business owner or organization. Several entities, including the federal government, state and local governments and private corporations provide funds for small businesses in specific industries that meet certain eligibility requirements.

Unlike a business credit card or loan, small business grants don’t require repayment. Although grants are considered free money, an organization or individual typically has to spend a lot of time and effort researching available grants and writing grant proposals.

In addition, some small business grants come with specific guidelines on how you can use the funds. Failing to adhere to the rules may result in repaying some or all of the money you receive.

Small Business Grant vs. Business Loan

Although a small business grant and loan are both ways to get funds for your business, they operate differently. A small business loan, a small business grant, has to be repaid, plus interest and any fees a unlike lender charges.

The business loan application process also differs. When you apply for a small business loan, a lender normally reviews your personal and business credit scores to determine whether you qualify. A grantor, on the other hand, doesn’t check your credit since it doesn’t expect repayment.

In addition, when you apply for a business loan, you’ll likely receive funds faster than applying for a grant, provided you qualify. For example, some lenders can approve qualified applicants on the same business day and disburse funds within a few days. However, if you apply for a federal grant, it can take up to six months for a grantor to make a decision.

Types of Small Business Grants

Several types of small business grants exist, including Covid-19, federal, state and regional and specialty grants.

Covid-19 Small Business Grants

Covid-19 grants are available to businesses that have suffered financial loss as a result of the pandemic.

  • Fiserv + Clover Back2Business Grant Program: This program provides grants to Black and minority-owned small businesses in certain cities that have been affected by Covid-19. To qualify, you must be 18 years or older, own a business that was formed before Jan. 1. 2020 with annual revenue of less than $1 million. Applications are currently closed but additional grants are anticipated in the new year.
  • Ohio’s Entertainment Venue Grant: Ohio’s Department of Development administers grants up to $30,000 to museums, movie theaters, sports arenas and other entertainment venues impacted by Covid-19.
  • Restaurant Revitalization Fund: The US Small Business Administration (SBA) provides grants to bars, restaurants and other eligible businesses impacted by Covid-19. Applications are now closed.

Federal Small Business Grants

The federal government awards billions of dollars in funds each year to small businesses that engage in work that benefit the public, such as infrastructure and scientific research projects. You can find federal small business grants by visiting Grants.gov.

  • SBIR and STTR Programs: These programs offer federal funds to small businesses that engage in scientific and technological research and development that has the potential to be commercialized. To qualify, a business must operate for a profit and have no more than 500 employees.
  • US Department of Energy (DOE) Grants: The DOE announced on Oct. 18, 2021 it set aside $105 million for small businesses that invest in clean energy research and development. Funding will be administered by DOE’s Small Business Technology Transfer (SBTT) and Small Business Innovation Research programs (SBIR). You can find more details on the DOE’s funding opportunities page.
  • National Institute of Health (NIH) Grants: The NIH offers numerous grants to small businesses that engage in biomedical and behavioral research. There are thousands of grants available on its grants and funding page.

When searching for federal small business grants, keep in mind that the federal government doesn’t offer free money to individuals to start a business. If a website promises to give you free money from the government, it’s likely a scam.

State and Regional Small Business Grants

State governments also offer funds to small business owners. You can search for these grants online or by contacting your state’s economic development office.

Corporate Small Business Grants

Corporations, like Visa, offer small business grants to nonprofit organizations, startups and other organizations.

  • Visa Everywhere Initiative: This is a global competition designed for startups that focus on solving commerce and payment issues. Winners receive free money, as well as global exposure for their business. You can sign up to be notified when 2022 applications become available.
  • Walmart Local Community Grants: Walmart gives grants that range from $250 to $5,000 to nonprofit organizations that benefit the community. The application deadline is December 31, 2021.
  • Nike Community Impact Fund: Nike, in partnership with the Charities Aid Foundation of America, awards to nonprofits in select metro areas that have a positive impact on communities through sports and other community-focused initiatives.

Specialty Small Business Grants

Some organizations set aside funds for certain groups of business owners who face unique challenges, including minors, veterans and women.

  • Black Founder Startup Grant: The SoGal Foundation, along with its partners, offer several cash grants that range from $5,000 to $10,000 to Black women and nonbinary entrepreneurs. To qualify, you must have a legally registered business, identify as a Black woman or Black nonbinary person and plan to seek investor funding to scale.
  • The Veteran Small Business Award: The Street Shares Foundation hosts a pitch contest each year for veteran-owned businesses that have a social impact on the military community. If you qualify, you must create a pitch video and submit an online application. Applications are closed for 2021.
  • The Amber Grant Foundation: The Amber Grant foundation awards $14,000 each month and $25,000 in December to women-owned businesses. While applying for this small business grant is easy—you only have to fill out a short form—the application fee is $15.

How to Qualify for a Small Business Grant

Eligibility requirements vary based on the type of grant you’re applying for. A grantor may require that your business operates in a specific industry, fits its definition of a small business and meets a minimum annual revenue threshold.

Before you apply for a small business grant, review the requirements carefully to ensure you have the best chances of qualifying.

How to Apply for a Small Business Grant

The grant application process varies from grant to grant. For instance, if you apply for a small business grant with the Amber Grant foundation, you can complete your application within a few minutes by submitting a short form. However, when you apply for a federal grant, you’ll be required to submit a formal grant proposal and it could take weeks to finish your application.

Here are some documents and information you may need when applying:

  • Your name
  • Personal story
  • Business plan
  • Business pitch
  • Annual revenue
  • Bank statements
  • Years in business
  • Purpose of funds
  • Number of employees
  • Website name

If you need help your grant application, contact your local SBDC.

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