An amount of money given to a business by an investor or organization to grow their business.
How Grants Work
An organization or individual does not typically treat a grant like a loan. The grant winner does not have to give up collateral to qualify for the grant or make repayments. Yet, not all businesses qualify for a grant, as each grant has a specific focus. The government and private corporations award grants. Before you qualify for a grant, there are three steps that you need to take, they include:
1. Find the Right Grant
Grants are tailor-made to suit different types of businesses. A quick web search will help you to find relevant grants and narrow down your options for application.
2. Research the Grant
Research everything you can about the grant that you are interested in. The awarding bodies will have contact details on their websites, and you may use these to contact them for more information. Ensure that you read through the grant's objectives with a fine-tooth comb and ensure that the application time frame suits your needs.
3. Apply for the Grant
Once you understand what the grant is about and meet all the requirements, you can apply. Submit all the relevant documents and fill out the application. Now, the ball is in the court of the investors who are supplying the grant. Most grants offer the option of tracking the progress of your grant application once you submit it.
Example of a Grant
If you are a small business owner looking for a grant to expand your business, you can start by searching for small business grants offered by the government or private organizations. Your search will give you a wide array of grants to choose from.
For instance, you could begin by searching for federal grants online. To search for these grants, visit the government grants website. After viewing different grants, you can view which ones will best fit you and your business.
The State Trade Expansion Programme (STEP) is an excellent example of a grant that upcoming small businesses in export can apply for. It helps small businesses increase their trade footprint within their state and beyond.
Significance of Grants
When you start a new business, the chances are that you funded your venture from your savings and possibly from family members or a business partner. However, for your business to grow, you need larger capital investment. Small businesses are usually cash-strapped, and the last thing you need is to service a loan with hefty repayments.
Grants help to grow your business in many ways without any repayments to think about. Some of these ways that a grant will help to grow your business include;
- Increasing your inventory
- Employing and training more staff
- Growing your capacity
- Expansion by opening more locations
- Buying machines and resources that your business needs
Grants are essential to your small business as they are 'free money.' Grants give you peace of mind to run your business, allowing you to focus on growing your business without the fear of taking on a loan.
Types of Grants
There are various categories of grants available to small businesses. These are the main ones that you may find your business in need of:
Resource and Training Grants
Resource and training grants are awarded to small businesses. They help you grow your capacity and staff development. These grants are to pay for any training that your staff needs. They are also awarded for buying resources for a business project that you are running. With the money awarded from grants, you can pay experts in your field of business to train your staff. You can also buy resources that will help take your business to the next level.
These grants are awarded to small businesses to help fund a particular project. For instance, if you need to increase your inventory. The Regional Growth Fund is one such type of grant.