Considering grants are free money that do not have to be repaid, they would be a great way to fund your business. However, like all good things in life, they do not come very easily and require some work on your part to apply and receive funds.
The primary place to look for small business grants is through state and local programs. While grants through the federal government are possible, it should be noted that the U.S. Small Business Administration (SBA) does NOT give small business grants. Instead, federal grants can be searched for through the Small Business Innovation Research (SBIR) Program as well as the Small Business Technology Transfer (STTR) Program, whose annual grant contributions combine to around $2billion.
Almost all grants, from any source, require that small businesses meet the size standard established by the U.S. Small Business Administration (SBA) for their specific industry. Here are a few of the most common criteria:
- 500 employees for most manufacturing and mining industries
- 100 employees for all wholesale trade industries
- $6 million for most retail and service industries
- $28.5 million for most general & heavy construction industries
- $12 million for all special trade contractors
- $0.75 million for most agricultural industries
Grants are typically given out like strategic investments where the money provided will go towards improving and progressing the underlying issue or cause that a company tackles. For example, in 2011, the National Cancer Institute awarded the University of Virginia Cancer Center a $9.55 million grant for studies aimed at improving treatment for advanced prostate cancer.
You should expect to deliver a grant proposal letter as well as a business plan when applying for grants. If you feel you need help with what information your business plan requires, email us and we would love to help you out!