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What Are Startup Business Grants? Should You Apply For It?
The idea of a startup business may seem like the best thing to do when you are tired of your regular nine-to-five jobs. Startups are fun, they offer you a lot of freedom, and they are something that belongs to only you. However, as fun as the idea is, the biggest challenge of a startup business is gathering the funds. Many good startups fail in the very first stages due to the lack of capital. This is where the startup business grants come to the rescue.
These micro yet mighty investments help the founder get the very first employee or invest in a brand new technology that could help take their businesses forward.
The best part of the startup business grants is that there is something for every businessman. Therefore, everyone has the opportunity to fetch the benefits.
In this article, we shall discuss extensively startup business grants and their type so you can have a better understanding of the entire concept and fetch one for your business as soon as possible.
What Are Startup Business Grants?
Startup business grants offer limited and small investments to small business owners. These investments may range anywhere from a few hundred bucks to a hundred thousand or even more. And the best part about these grants is that they are only for small or startup businesses.
This is one of the best first steps if you are not prepared to go through the more traditional and tough venture capital process for funding. Grants may come through government agencies, social responsibility units of big corporations, or nonprofits.
You would not necessarily have to repay the grants like loans, or a decision-making stake in the business like the traditional investors, or any other trade-off options like equity.
If you are eligible to apply for startup business grants, it will depend on the body that offers it. Therefore, make sure you are aware of the size, demographics, and the industry your business belongs to before you apply for the loans.
A Few Considerations To Make Before Applying
Applying for these loans takes up a significant amount of effort and time. Additionally, to fill out all the required information, you would have to go through multiple rounds of interviews or win an actual pitch contest to get the funding. If you are in immediate need of cash to revive your business, you must consider getting a loan or any other short-term business option initially.
Otherwise, imagine the balance between the time, the support, and the total capital that you will receive along with the grant. Some grants are a part of bigger support networks, like membership to a residency or an accelerator.
Others may also offer non-capital support, such as mentors or advisors.
Here are all the things that you need to think about if you are thinking about applying for startup business grants:
- How competitive is it to win the grant, and do you have enough time to write down a very strong application?
- How may you plan to make use of the funds you get from the grant? You will need to have one of the most solid business plans for the judges to assess.
- What commitment will you have to make to the community or to any program like an accelerator if you are receiving the grant?
- Whether the vision or the mission of the grant is matching your business model.
- Your eligibility for the grant depends on the demographics, revenue, and all other factors.
- The total number of grants that you would want to apply for in one go. Especially if they may come with wider commitments.
There are more than a thousand grants that you could choose from. However, do not try everything all at once. Narrow the search as much as you can based on your business goals and your growth milestone.
How To Apply For Startup Business Grants?
Because the grants come in multiple sizes and shapes, each of the processes of application can be unique. These grants are generally mission-driven or are aligned to certain industries, geographics, or demographics. Therefore, what you would want to apply for changes drastically based on you, your business model, and the location of the company.
Typically, most of the applications will require certain pieces of information, such as:
- Name of the business, address, and legal status
- An application essay, a resume, and a cover letter that explain what the business is and its founder story.
- The elevator pitch or the pitch deck.
- The reasons why you are applying for the grant.
- Business metrics such as the number of customers, revenue, and the total number of employees.
- Long-term and short-term business plan.
- Social media handles, website, and your headshot.
When May You Apply For Startup Business Grants?
The best time to apply for startup business grants varies from one business to the other. However, you need to be an established business in one way or the other if you wish to apply for these grants.
Some grants assess businesses on a rolling basis. Others would have pre-decided deadlines every year. Either way, you will be required to decide on your eligibility based on every grant. It is because some of the organizations that offer these grants require that you are already making a given amount of revenue or have a minimum customer base. While others may be totally the opposite. Their focus could be more on what your business may achieve than what it is achieving at present.
Startup Business Grants You May Apply For
Here is a list of popular startup business loans that you may apply to help aid your business and make it reach new heights:
- Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR)
- State Trade Expansion Program (STEP)
- US Economic Development Administration (EDA) Grants
- Minority Business Development Agency (MBDA) Grants
- Rural Business Development Grants
- National Institute of Health (NIH) Grants
- Visa Everywhere Initiative
- FedEx Small Business Grant Contest
- Tory Burch Foundation Fellowship
- Fearless Strivers Grant
- Capital One Business Grant
- Amber Grant for Women
- Operation Hope
- StreetShares Foundation
- IFundWomen
- SoGal Black Founder Startup Grant
- The Barstool Fund
- 500 Global Flagship Accelerator Program
The Bottom Line
This was all that was there about the startup business grants. While these grants are extremely beneficial and require no repayment, they are hectic as well. The sanction takes a lot of time. Therefore, applying for it for short-term requirements is a bad idea.
Also, they have a varied eligibility crisis. Hence, you need to be sure that you are meeting all the eligibility areas and have a strong competitive advantage for the approval.
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