Money moves a small business growth engine. But finding a business loan is not easy when you have just a business idea. In such a situation, you often think – how do I get free money to start a business?
The good news is you can get free money to start a small business. Many organizations, government and private, offer business grants to help people realize their dream of running a business.
Whether you’re thinking about starting a new business or you’re already running one, these business grants can help you get going in the time of a cash crunch.
Let’s dive in:
How do I get Free Money to Start a Business?
Small business financing is tough. So, there is no surprise that 39% of small businesses use cash to finance their ventures.
When you’ve just started, securing a loan for your business is an uphill battle, even if you are looking at franchises under 10K. Even if you get a loan, it is often difficult to pay it back initially when your business is not making a decent profit.
Therefore, it is a better idea to look for small business grant money than apply for business loans.
Government grants, general small business grants, industry-specific grants, and diversity small business grants are some popular ways to get free grant money for small business.
Best Places to Get Free Money to Start a Small Business
Here are the best places to get free money:
Small Business Administration Grants (SBA)
SBA is a federal agency created to support small business owners and entrepreneurs in the country.
SBA offers limited federal small business grants that most often come in the form of technical assistance, but their real value exceeds thousands of dollars:
Here are key SBA grants to support small businesses:
1. 7(j) Management and Technical Assistance Program
If you want to get ready to win federal, state, and local government contracts, 7(j) Management and Technical Assistance Program can help you do that. Eligible businesses receive training and one-on-one consulting in a wide range of business activities, including marketing accounting, contract management, etc.
2. SBA Mentor-Protégé Program
Under this program, a small business owner gets opportunities to learn key business growth functions from an experienced government contractor.
3. Restaurant Revitalization Fund
This is one of the popular coronavirus small business grants. Eligible restaurants, bars, or other qualifying businesses that have been affected by Covid-19 can apply for Restaurant Revitalization Fund.
4. Small Business Innovation Research Programs (SBIR)
Powered by SBA, the SBIR program is good for small businesses that do independent research and development.
5. Small Business Technology Transfer Programs (STTR)
STTR program is also for small businesses that want to do research and development. But, in this program, small businesses have to form partnerships with non-profit research institutions.
Both SBIR and STTR programs have three phases. Learn here more about it.
General Small Business Grant Programs
Business owners should not be disheartened if they cannot qualify for federal grants. These days, many non-profits and private companies offer ways for how to get start-up funding for a small business.
Explore the following popular options:
1. Business Development Grant from the NASE
The national association for the self-employed (NASE) offers a business development grant worth up to $4,000. To apply for NASE Growth Grants Program, you must be a member of NASE.
2. Nav’s Grant for Small Businesses
The grand prize winner of Nav’s Small Business Grant receives $10,000, and the runner-up gets $5000.
3. IdeaCafe Grant Program
For someone who wants to own a business, IdeaCafe Small Business Grant Program is a good option as it is free, quick, and easy to apply. The prize is worth $1000
Industry-Specific Grants
If yours is a specialty business, you can apply for industry-specific grants. Many business grants are reserved for industry-specific businesses.
Let’s look at the following industry-specific grants that can give you essential free money to get started:
1. The Halstead Grant
For a silver jewelry artist, the Halstead Grant is ideal to get you seed money. The grand prize is $7,500 plus other benefits.
2. Power Forward Grant
Black-owned small businesses having 1-25 employees and operating across the New England area can apply for Power Forward Small Business Grant, which awards transformative grants of $25,000 on a rolling basis.
3. Sephora Accelerate
This grant is aimed at incubating founders in the beauty sector. Under Sephora Accelerate, beauty founders will go on a six-month journey inclusive of skills and know-how to build a successful business.
4. Grow by Invoice2go
Minority-owned businesses can apply for Grow by Invoice2go, which offers up to $15,000 to grow a business.
5. eBay Up & Running Grants
The US eBay sellers are eligible to apply for eBay Up & Running Grants, which provide $10,000 grant packages to each qualified seller.
State Grants
Check the following state grants:
1. State Trade Expansion Program (STEP)
Though administered by SBA, the STEP program works through states and territories. Under this program, qualified businesses will get the financial assistance that will help them enter and expand into international markets.
2. Small Business Development Centers
You can also explore a Small Business Development Center (SBDC) in your local area, which can help you improve business planning, strategies, and operations. Though SBDCs don’t offer any money, they can prepare businesses to qualify for various grants. You can visit the website of SBA to find an SBDC in your area.
To know more about small business state grants, you should check with your local governments.
Green Business Grants
As the name suggests, green business grants are awarded to green businesses. In many cases, this is a sector in which you can learn how to start a business with no money from others in the field. However, it is a labor of love as the people who do it want to change the world.
If you’re running a green business and looking for some money to scale up, you can explore the following options:
1. Rural Energy for America Program (REAP)
The REAP program is for agricultural producers and rural small businesses who are working for:
- Renewable energy systems
- Making energy efficiency improvement
2. The Office of Energy Efficiency and Renewable Energy’s Funding Programs
EERE funding programs are directed towards advancing clean energy technologies. You can check here EERE funding opportunities.
3. Cisco Global Problem Solver Challenge
Cisco Global Problem Solver Challenge offers grants as 15 different awards, focusing on acknowledging unique ideas that take the help of technology for social impact from early-stage entrepreneurs around the world.
Non-Profit Grants
If you’re running a non-profit company, you have plenty of options to receive grant funding. Many private businesses and companies provide grants that can help you move forward.
Here are a few popular options for non-profit grants:
1. Patagonia’s Corporate Grants Program
Patagonia’s Corporate Grants Program is a good option to explore for those working in the environmental field.
2. Global Grand Challenges
Grand challenges hosts a family of initiatives that promote innovation in order to solve global health and development problems.
3. Walmart’s Grant Programs
Organizations working toward creating opportunities, advancing sustainability, strengthening community, and center for racial equity can be the right fit to apply for Walmart’s grant programs.
4. Wells Fargo Grants
Wells Fargo supports low-income communities through grants to local nonprofits.
Startup Grants for Women-Owned Businesses
Many organizations are working for the economic development of women entrepreneurs.
The following are two popular startup grants for women:
1. Amber Grant
Amber Grant is hugely popular among women entrepreneurs. The Amber Grant Foundation gives at least $10,000 every month in Amber grant money.
2. The Cartier Women’s Initiative
The Cartier Women’s Initiative offers regional awards and Science & Technology Pioneer Award to women-run businesses.
Startup Grants for Veteran-Owned Businesses
Here are two popular startup grants for veteran-owned businesses:
1. The StreetShares Foundation
The Veteran Small Business Award from the StreetShares Foundation is a popular financial grant for veterans who lack financial support.
2. Veteran Assistance Programs
Every year, the federal government put aside a certain percentage of contracting dollars specifically to businesses owned by veterans under veteran assistance programs.
Competitive Small Business Grants
The following grants are super competitive as many people apply for them. It is no doubt that winning these grants is tough, but the grant money makes it worth competing.
1. FedEx Small Business Grant Contest
The grand prize winner of the FedEx Small Business Grant Contest gets $50,000, plus $7,500 in FedEx Office print services.
2. Visa Everywhere Initiative
Visa Everywhere Initiative offers business grants that can shine existing businesses more. The regional and global finals receive validation, exposure, and monetary benefits.
Final thoughts,
A grant is a good way to get money for your business. But the competition is fierce when it comes to winning a grant. So, it always helps prepare for a grant beforehand – know the application process well to avoid getting disqualified.
Whether you’re running a local business or national business, you can definitely find a grant, and winning it can offer you some sort of financial protection. So, look harder. For government help, GRANTS.GOV and CHALLENGE.GOV are the ultimate places to know about available opportunities for free money.
Image: Depositphotos
This article, “Where to Get Free Money to Start a Small Business” was first published on Small Business Trends