If you’re a small business owner, chances are that this last year has provided some financial setbacks for your operation due to the COVID-19 related slowdowns. The government provided one-time relief payments and many financing options are still available, yet many businesses continue to struggle.
A common solution for small business owners is to apply to any of the thousands of available small business grants offered by local, state, and federal organizations, private corporations, and numerous other sources. Small business grants are a great way to fund your business without strings attached; for that reason, they’re highly sought after.
Follow this guide for the insider’s take on the best small business grants available in 2020, as well as how to decide which grants may be best for your business. The field of competition for grants can be massive, but if you know which grants your business needs, and which it deserves, you’re far more likely to receive highly-coveted grant-based funding.
Small Business Grants: An Overview
Essentially, small business grants are upfront donations to a company’s efforts to survive a crisis, grow their operations, or provide a specific service. Nonprofits and corporations across the globe provide funding for the expansion and growth of companies that match certain criteria.
Many grants are offered to businesses or initiatives that address hot-button social or political topics, and many are offered to specifically assist in the growth of businesses owned by people of color and other minority groups who have a more difficult time accessing capital from traditional financing sources.
For businesses in search of COVID-19 relief, small business grants may be your solution. Since the Coronavirus crisis began, a number of avenues have emerged for small businesses impacted by the shutdowns to receive much-needed funding. Grant funding can be a lifesaver for your business, as it does not require repayment of any kind once you receive it.
Various branches of government, private corporations, and nonprofit groups sponsor grants for small business owners that fit their application criteria. While the options are nearly limitless for small business owners searching for grants, owners typically compete with thousands of other businesses or organizations for “free money”, so it pays to research which grants are right for your business before sending out grant applications.
COVID-19 Relief Grants
As we mentioned before, the current COVID-19 crisis makes the potential impact of small business grants even greater. As public lockdown orders and business slowdowns have hit cities across the country, many corporations and nonprofits have popped up to provide COVID-19 relief grant funding to struggling businesses. We compiled some of the best relief-grant options for small businesses below.
Economic Injury Disaster Loan Advance
The Small Business Administration (SBA) has provided Economic Injury Disaster Loans (EIDLs) to businesses reeling from crisis since the beginning of the pandemic. While these SBA-sponsored loans do need to be repaid, the SBA offers supplementary $10,000 grants to particularly needy businesses that apply for an EIDL. These advance payments are “free money” intended to stabilize cash flows and may be a place to start if you’re looking for immediate relief.
Amazon Neighborhood Small Business Relief Fund
As of May 2020, Amazon’s Neighborhood Small Business Relief Fund launched in response to the Coronavirus crisis and has provided $11 Million in grants and rent payments to hundreds of small businesses in need. Amazon doesn’t hold grant recipients to any sort of requirements for their use of the money, except that the donation must go toward helping sustain operations throughout and beyond the pandemic. If you’re a very small business operating in the Seattle area, Amazon’s Neighborhood fund may be able to help you weather the storm.
Verizon & Hello Alice Business For All Grants
In response to the COVID-19 Pandemic, Hello Alice, Verizon, Mastercard and a number of other organizations are partnering to offer Business For All grants for small businesses. Thus far, Business For All has provided over $1.5 Million to owners, with most funds being gifted to women, people of color, people with disabilities, and LGBTQ+ identifying small business owners.
One grand prize winner receives a $50,000 grant, two others receive $25,000, and fifteen additional finalists receive a $10,000 gift for the growth and development of their business. In addition to providing funding to young startups and struggling businesses, Business for All pledges to connect owners with networks of successful mentors and fellow entrepreneurs, and to support peer-to-peer mentorship through a digital connection platform for grant recipients.
Federal Small Business Grants
In addition to the thousands of grants awarded each year by coalitions and nonprofit organizations, the Federal government operates dozens of grant programs, and awards millions in grant money to small businesses each year. A number of sources can connect you with the proper government organizations to pursue the best grants for your business, a couple of the best are listed below.
Grants.gov
If you’re new to searching for government grants for your business, there’s no better place to start than the grants.gov website, which lists all available grants from throughout the government. Spend some time searching through the website in order to find which grants may be right for you.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR)
If your company is in the business of technological innovation and problem solving for today’s world, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs may be a great way to access government funding. Both SBIR and STTR grants seek to connect tech-based small businesses with research institutions in order to investigate potential innovations in their areas of focus, and then provide small businesses with a greater capacity for commercialization based on the innovation discovered in their research.
Both grant programs are highly competitive, and both take place over three phases. In the first phase, grant awardees are partnered with appropriate research institutions and awarded funding to cover 6 months (SBIR) or 1 year (STTR) of research or research and development. Owners and researchers that prove their potential for meaningful innovation and commercial success after phase 1 are able to receive larger grants during phase 2, which cover longer spans of time and are meant to extend and verify previous research and development efforts. Ultimately, grant awardees that successfully navigate these two levels of application often find themselves very well positioned to commercialize their new innovations.
While the SBIR and STTR programs are administered in a similar fashion with similar objectives through the various government organizations that sponsor the awards, there are some key differences between the two.
First, the SBIR program requires that the Principal Investigator in charge of fulfilling the grant’s arrangements be primarily employed by the small business component of the partnership. Contrastingly, STTR grants allow Private Investigators to work either with the business or research elements of the team. This relates to the next key difference between the two programs, which is the degree to which collaboration is required for awardees.
SBIR awardees are able to complete up to 33% of research work during Phase I, and 50% in Phase II, with the partnering research institution taking the bulk of the work aside from those allotments. An STTR awarded-business owner, however, is required to provide at least 40% of the work, the institution must provide 30% and the two must collaborate on the rest. Consider the associated costs and procedural changes that would impact your operation if you are to pursue either of these grants.
Federal Department Grants
Many smaller entities within the Federal government, including both agencies and entire departments, offer grant programs of their own. The Department of Defense, NASA, Environmental Protection Agency, and other federal departments offer grants to small businesses whose work contributes to their agency’s mission. Many grants awarded by federal agencies are issued through the SBIR program, and therefore seek to assist your business’s commercial innovations in their field.
State or Regional Small Business Grants
If you’re looking for funding on a smaller scale with a lower competition pool, state and local governments provide grants all the same as the federal government, though on a more specific basis. Similarly, a number of organizations across the country support the distribution of grant funding throughout particular regions and communities.
Local Initiatives Support Corporation
One organization driving the equitable distribution of grant funding is the Local Initiatives Support Corporation (LISC), which supports initiatives from affordable housing to commercial development in communities across the country. Seeking to distribute wealth and resources to rural and urban communities alike, LISC offers grants to businesses and projects that strive to uplift vulnerable communities, connect disparate areas of the country or otherwise influence the social-impact causes that LISC supports.
Small Business Development Centers
Most states and regions in the United States also operate Small Business Development Centers (SBDC) to help connect you with mentorship, collaboration and funding for your business’s growth and success. To find out more about the consultation and funding opportunities available in your area of the country, visit your local SBDC’s page.
Private Small Business Grants
A third key source of grant funding for small businesses can be found in the private sector, where dozens of nonprofits and private companies offer small business grants each year for any number of causes.
FedEx Small Business Grant
A prominent annual grant is the FedEx Small Business Grant, which is awarded to several businesses each year after an extensive competition. This past year, FedEx awarded over $250,000 to 12 qualifying businesses, with the only stipulation being that the funds be used to help their operations grow and scale their operation. While the 2020 contest has concluded, the details of the 2021 application process and competition will be announced in the coming months.
NASE Growth Grants
The National Association of the Self Employed (NASE) has long provided small business owners and self-employed entrepreneurs valuable legal, healthcare and consulting services to small operations that may not have the liquidity to cover those expenses on their own. Recently, however, NASE expanded their efforts to help the self-employed by offering NASE Growth Grants to Association members. Participating owners are able to apply for a $4,000 growth grant each month. NASE Growth Grants can be a perfect source of funding for singular large purchases or investments in your business’s physical capital or marketing materials.
Visa Everywhere Initiative
If your business is dedicated to solving problems through payment, exchange, and e-commerce innovation, the Visa Everywhere Initiative may be a great place to look. Each year since 2015, the Visa Everywhere Initiative has sponsored several competitions each year for business owners with plans to tackle the payment and commerce challenges pestering Visa’s global network. Each year, a list of challenges is released, each with a different award value and framework. Information on the 2021 Visa Everywhere Initiative will be posted on their site in the coming months.
Nav’s Small Business Grant
If you know your business needs funding, and don’t want to be saddled with research requirements or expectations of your funding’s use, the quarterly Nav Business Grant is a great, accessible option. Each quarter, Nav invites small business owners to apply for $10,000 grants for growth, development or survival. Applications can be submitted using your brand social media platform, and Nav does not require that applicants meet any particular criteria; the Nav Business Grant, in short, is up for grabs for any and all small businesses that can sell their cause.
Small Business Grants for Specific Business Owners
Just as many nonprofits and corporations offer grants for specified areas of business and social innovation, there are numerous grants available to those that identify as members of particular affinity groups. For example, dozens of grants are issued each year for black-owned small businesses, women-owned businesses, and veteran-owned businesses in particular. Not only do these grants typically have slimmer application pools, but they also allow recipients to connect with other small business owners who may have similar backgrounds or ideas for the future.
Author Bio:
Jeffrey Bumbales
Director, Marketing & Strategic Partnerships
