One of the biggest myths regarding small business funding is the so-called abundance of grants, or “free” money available to entrepreneurs. Thanks to the proliferation of late-night infomercials espousing “easy money” for starting a business or funding a current business, the myth has exploded in recent years.
Federal grants are the most difficult to access because these usually focus on a particular niche such as green energy, technology, or scientific research. The programs, which can also be highly competitive, seek out entrepreneurs who need start-up assistance in solving research and development issues for national defense, healthcare and information systems.
Since 2006, the National Association for the Self-Employed (NASE) has offered the NASE Growth Grant® program exclusively for its members, as part of its comprehensive benefits package. Members can apply for grants of up to $5,000 for a specific business need on a rolling basis throughout the year.
“Past recipients have used grants for the purchase of new equipment and software, advertising and marketing efforts and other business needs,” said Molly K. Nelson, member communications manager for NASE. “We’ve awarded over $650,000 to 145 grant recipients since the program began.”
According to Nelson, the organization decided to start the program because they learned the majority of their members initially funded their small businesses with personal savings.
“And many continue to use personal savings for ongoing financing. We know how difficult it can be for small-business owners to access the capital they need to grow their businesses, and the NASE Growth Grant® program has been able to help numerous business owners grow their businesses with just a small amount of capital,” she added.
Numerous private foundations provide grant opportunities for small business owners. Depending on the foundation or non-profit, assistance may be available to minorities, women and veteran owned businesses, among other diverse populations. The key is finding the right organization, providing required information within specified deadlines and competing sucessfully against a large pool of applicants for a small amount of award money.
Here are two examples of private foundations that offer grants:
Small Business Development Centers
Contact one of over 1,000 small business development centers across the country to meet with a business adviser and learn about local grant opportunities. Many individual states offer programs tied with economic development agencies. Additionally, many larger metropolitan cities have grants available through city-sponsored business development programs.
For example, in Corpus Christi, Texas, the city offers small business grants through its Business and Job Development Corporation. The voter-approved entity is funded through a 1/8th cent city sales tax and provides grants to companies and non-profit organizations for education, job training, business development and incubation.
Corporations have begun to offer one-time grant opportunities for small businesses, either as a contest or in combination with a required application. Several have also included social media elements that allow small businesses to gather grassroots support on the local level. Although most of the corporate grant programs listed here have expired, it is still noteworthy to check back with these companies for possible 2013 opportunities.