US government small business grant is a confusing topic for entrepreneurs. Many have heard that US government grants are available for starting small business. Yet they cannot find how exactly to get a grant for themselves
According to SBA, which is the agency in the US for supporting small businesses, it does not extend grants to individuals for starting a small business. SBA grants are for:
- Non-profit organizations,
- Intermediary lending organizations, and
- State and local governments.
SBA helps these organizations to expand their ability to provide management, technical and financial assistance to small businesses.
It is the state and local governments that might extend grants to small businesses. In addition to government organizations, private groups might also provide grant assistance.
Grants Are for Specific Projects
US government small business grants, even when channeled through other organizations, are subject to strict conditionalities. These conditionalities might relate to eligibility or the purpose for which the grant is utilized.
Eligibility can be related to location of the business (e.g. economically backward or disaster area), sex (woman), race (minority group) or some other factor. The purpose of the grant might include such conditionalities as providing employment to persons in the backward area.
SBA grants are mostly for organizations such as Women Business Centers engaged in small business promotion activities. Other typical examples of US government grants for small business include:
- Rural Business Enterprise Grants to facilitate development of small business in rural communities
- Micro Enterprise Development Grants to increase the number of micro-enterprises and enhance the management capability of micro entrepreneurs
Non-profit organizations engaged in the above kinds of activities are the entities that get these grants, and not individuals starting small businesses.
Technology Innovation Grants
There is a US government small business grant for technology innovation research. Called the SBIR – Small Business Innovation Research – program, the federal grant for small business seeks to support research/research and development that has the potential for commercialization.
This federal grant for small business is to support advanced technology research. The following examples of topics for research would give some idea on this matter:
- Cancer Prognosis & Prediction
- Knowledge Integration Across Distributed Heterogeneous Data Sources
- Bio-engineering nanotechology initiative
The National Science Foundation runs the SBIR programs. Applicants of this federal grant for small business would have to submit a detailed proposal in a standard format. If you think you could qualify for this grant, you can go to SBIR home page at: US Government Small Business Grant For Technology Innovation
Could You Get A Grant for Small Business?
You might, if you:
- Can spend a great deal of time looking for a grant for which you might be eligible, or
- Hire a consultant to do this for you.
If you decide to do this yourself, you might first look around your locality. Is there some local initiative to support small businesses in your area? Some communities have programs to generate employment or help particular sections of society by supporting small business ventures. These might be government or privately funded.
Be aware however that the effort could affect your business prospects because your time and attention get diverted to grant search. Even if you manage to find a grant source quickly, you might have to comply with a great deal of formalities, and wait for a considerable time, before the grant is approved, if at all it is approved. Chances for rejection are good as there would be competition for available grant funds.
Grant Application and Approval Process
Federal grants are announced at specific times. There would be competition from different applicants for the grants. Your proposal would have to compare favorably against these competitive proposals if it is to succeed.
The proposals would have to be submitted in a detailed format that brings out their genuineness and soundness. These would then be scrutinized rigorously by the grant- giving agency.
Considerable time could pass before your proposal is evaluated and more time could elapse before the money is released.
You would have to maintain records and submit regular reports about the utilization of the grant money. The records might also be scrutinized by inspectors to ensure that these are maintained properly and that the federal grant is being utilized for authorized purposes.
Major Source of US Government Grant Information
There are numerous special purpose grants some of which are for small business programs. If you wish to investigate whether you are entitled to any US government small business grant, you could check the Catalog of Federal Domestic Assistance at: Catalog of US Government Grants for Small Business and others
Could You Survive When the Grant Money Is Exhausted?
You might believe you could. However, without a carefully worked out and realistic business program, your small business is not likely to survive without further doles. And it would be unrealistic to expect a continuing flow of doles.
You can get a lot of assistance from SBA for developing your business program and detailed business plan. Your funding applications should be based on these. Grants would be only one source for the funding.
Be wary of consultants who promise you to get US government grants for your small business. They are not interested in your business, but in getting money for themselves. Even if they get you a grant, it might not carry you till your business begins to generate profits and cash surpluses.
There Are Genuine Funding Sources
Instead of spending your time and money searching US government small business grants, you could approach lenders who extend financial assistance to small businesses.
US government small business agency not only provides details of such funding sources, but would also help you prepare a sound business plan that would qualify for loans. Go to Government Small Business Loan page to see how SBA administers the loan programs.