Small Business Grants – What You Need to Know

Small business is categorized by its small capital, productivity, manpower and profit. Some of the business start ups are self financed. But most of them are financed by borrowing of money. In order to prevent higher down payment of interest to banks, the Government of many countries provide the small business grant. The business grant helps the entrepreneur to receive the principle amount without having to worry about the future repayment of it.

The business grants help in boosting the growth of small firms since the financial aid received from is a stable and reliable source. Small company grants are mostly obtained from the national Government or from the state or local authorities. Some industrial organizations or established corporations also provide such grants but are not always desirable.

Small business grants provide limited funding. The funding is targeted in specific areas. The main area is principal amount where capital investment is very low or unavailable. Small company grants are also provided for business related to farming, fishery or husbandry. The grant is targeted towards funding for hiring of manpower or for purchasing of new machinery and other equipments. If a separate building is required then the small business grant is directed towards purchasing of the land and constructing of the required structure. For more established businesses, the small business grants provide financing for research and development and improvement of technology. Furthermore, small business grants are provided for businesses with foreign exports to enhance international trade.

In order to avail the grant, a well drafted business plan is submitted to the Government or authority providing the grant. Usually the loan provider is the Small Business Administration. The borrower should clearly mention the areas where the grant money will be invested. It is expected that 50-85% of the grant money should be invested into the business. The business grant is approved subjected to guarantee. Upon approval, the credit analysis is done and the final report is submitted to the business lender. The lender directly disburses the amount to the small business owner. The loan repayment is done on monthly installment basis to the business lender.

In the US, obtaining a grant for start up businesses is rare. It is provided only for selected category of businesses, especially those into higher technology. It is a time consuming procedure for the companies to obtain the small company grants. Hence such start up companies approach major corporations that provide the small business grants.

In UK, obtaining small company grants is relatively easier. The best source for these grants in UK is the Princes Youth Business trust. They provide entrepreneurs aged 18-30 years with grants of £1500-£5000. For start up businesses, the trust provides £250 for marketing and research work. In order to qualify for the small business grant, the individual should prove the non availability of capital and ensure that no other organization has provided the required funding. Also the trust should be satisfied with the business plan that has been submitted by the business owner.

USA Small Business Grants – Eligibility and Application Procedures

The classification for the small scale business is done based on its capital, profit, manpower and productivity. Few of the business are commenced with self finance and mostly it is done with the funds borrowed. The government in many countries has started funding by wayto small scale business mainly to prevent the huge down payment as interest to the banks. The grant given for the business assists the owners or the proprietors to get the principle amount and there is no worry for them to repay the amount in future.

It has given to the small scale business also helps in developing the growth of the small companies as the source from where the financial support received is reliable and stable. Generally, for business is obtained from the local authorities, state government of the national government. Few industrial organizations and the corporations that are established well also give these kinds of grants, but are not desirable all the time.

The funding by way to small scale business is limited. Particular areas are targeted for this kind of funding. Principal amount is the main area where the capital investment is very less or not available. The small scale business grants are also provided for other business related works like husbandry, fishery and farming. It is also targeted towards manpower hiring, purchase of new equipments or machinery. If there is necessity of a building separately, then the small business grant will be intended for purchase of land and construction of the building. In the case of business that is established, the small business grants are provided for development and research and also for technology improvement. The small business grants are also given for enhancement of international trading to the foreign exports.

The business plan should be drafted well and to be submitted to get the small business grant. Generally, the loan contributor for these small business grants is the SBA called as the Small Business Administration. It is also important for the borrower to clearly mention the places where the grant money will be utilized as the expectation is that around 50% to 85% of the grant money should be invested for the business purpose. The grant is given based on this guarantee of investment in business. Once the grant is approved, analysis is done on the credit and concluding report has to be submitted to the lender. Then the amount will be disbursed directly to the owner of the business by the lender.

Small Business Grant Source:

Learn the application procedures, various funding sources for specific types of businesses and eligibility criteria for small business grants.

Small Business Grants – Are You Eligible?

Government small business grants are a hot topic of discussion among small businessmen with limited access to funds and capital. The federal government does not provide grants for developing or expanding a small business; but the state governments does.

Small business grants are handed out to entrepreneurs by their home state governments. It is not very difficult to get business government grants, though it is time-consuming. The federal government on the other hand, does provide some low-interest loans to encourage and assist upcoming entrepreneurs. The criteria to get a small business grants usually depends on location, race, sex, sales revenue, total number of years in business and the purpose for which it has to be funded. The requirements for grant eligibility are specific and one must be prepared thoroughly for it with a clear-cut plan.

The initial steps involved in seeking business government grant are:

1. You have to spend a good amount of time and resources to search for small business grants program in your state. Thanks to computer and internet it has become less tedious now.
2. After you have searched a grant program matching your business plan, hire a consultant to apply for the plan. The consultant will make your grant application a presentable one before the state authority. Alternately you can spend some time learning the grant application process and apply. Remember you have overcome bureaucratic bottlenecks.
3. Define for yourself the time limit-do you want it now or wait for a year.

To find small business grants, one can look into the Catalog of Federal Domestic Assistance (CDFA). This CDFA lists thousands of grants from all government agencies. Many of these business grants are targeted at rural business improvement, minority business development or export-oriented businesses. After finding a Small Business Grants suiting your business needs be prepared to undergo lengthy and time consuming process of approval. You must be ready or tough competition as the grants’ funds are limited.

There are some tips to receive a grant.

1. Complete and accurate information of your business outfit is necessary. If your application contains incomplete details or inaccurate information, it may not make through the review process or may end in an ordinate delay.

2. It will be advisable to interact with your grant officer and come to know their concerns, budget limits, and constraints with your grant.

3. A well prepared business plan and demonstrating your strong business acumen will make your approach a discernible one. A smarter strategy would be to show the benefits it will make to US government agencies.

4. Bringing in an outside expert or consultant would add credibility to your application. Also it would create an impression of professionalism.

5. Keep tracking your application process. It will be helpful to be in contact with a concerned grants officer in a non-intrusive manner to tilt the balance in your favor.