Grants, Loans and Programs To Benefit Your Small Business – If you are planning to start a small business or have already owned an existing business you have several options for securing funding. Government small business grants and loans are available at the federal, state and local levels as well as corporations and nonprofit organizations.
Government agencies are one of the primary distributors of business grants and loans and support a wide array of enterprises. Applying for government grants and loans may seem an intimidating process however government business grants are excellent opportunities for aspiring entrepreneurs to grow and scale their businesses. This guide will throw light on how you can seek government grants and loans for small businesses.
Highlights of this Post
Who Qualifies For Government Small Business Grants?
To be eligible for government small business grants you need to fulfill the following eligibility criteria.
- Make sure your taxes are in good standing and you have no outstanding tax amounts or liens
- Business owners should have the majority ownership of the business as well as in the decision-making
- Small business owners should be able to provide government-issued photo IDs, personal documentation including the name of the owner and other valid paperwork
- Proof that the business is active and currently operating
- Proof that the primary means of income of the startup business owner was the qualified business
- The business began its operation and is operating legally including being registered with the Secretary of State if required
- Must prove you are operating a startup company in the United States of America.
- Must fulfill the limitation set by the program on the number of employees and the annual business revenue.
- Businesses should agree to use grant money for particular purposes that will benefit the business and also demonstrate the robust need for the grant.
- The applicant should also be a citizen of the United States, a legal permanent resident and have income within a particular threshold.
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Who Qualifies For Government Small Business Loans?
Prospective borrowers can qualify for government-backed small business loans on meeting certain eligibility criteria. The eligibility criteria may differ depending on the loan provider and the loan program however generally businesses are required to have less than 500 employees.
You must run a business within the United States and be a for-profit organization operating business in an eligible industry. Some lenders also require businesses to meet the time, revenue and credit score criteria. You need to check the criteria of every loan program before applying and work closely with your lender to make sure you can meet the terms and requirements.
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How To Apply For Government Grants And Loans For Small Businesses?
Government-backed grants and loans have certain eligibility criteria, application procedures, documentation requirements, interest rates and repayment terms which you need to consider before applying. Following are the steps that you need to follow while applying for government grants and loans for small businesses.
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Evaluate Your Needs
The first and foremost step is to determine your long-term business goal and the specific expense or project for which you need finance. Consider the cost of your proposed project, interest, and fees and determine how much you can afford in monthly payments.
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Check The Eligibility Criteria
Every government grant or loan has different requirements based on your personal needs, confidential situation and location. It is important to meet the credit score, annual income and personal requirements to qualify for government grants and loans.
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Find SBA Approved Lender While Applying For Government-Backed Loans
You can use the SBA Lender Match Tool to find an SBA-approved lender if you’re applying for government loans for small businesses and make sure the lender specializes in your business type and industry. You can also seek assistance from credit unions and local banks about SBA lending programs.
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Gather Relevant Documents
Before applying for government grants or loans for small businesses, it is important to gather personal and financial documents to make sure you go through a smooth application process. The standard documents included in applying for government grants and loans and as follows.
- Tax returns
- Bank statements
- A stable and feasible business growth plans
- Balance sheets
- Cash flow projects
- Income statements.
- Grant potential for satisfying the identified business requirements
- Propose how you are planning to use the government-backed loans or grants
- Personal identification documents such as government-issued photo ID passport, social security card etc.
- Tax ID or EIN IRS letter for reference.
Submit The Application And Wait For Approval
When you apply for a government grants or loan program that aligns with your needs you need to organize your documents, follow the application instructions set by the program and submit the necessary application form.
The grant or loan-providing officer of the program will review your application and determine if you can meet the eligibility criteria. Government grants or loan approval may range between a few weeks to months depending on the program, the complexity of your finances, the lender and other factors.
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Federal Government Small Business Grants
A comprehensive database of small business grants funded by the government and administered by different federal agencies is known as Grants.gov. You can find tons of government-backed small business grants by accessing this database.
The SBIR offers grants to small businesses to help them with federal research and development. This program is a highly competitive awards-based program. This program helps businesses to achieve their scientific excellence and technological innovation.
The STTR program assists those small businesses that have a formal collaboration with a research institution. They do work with the collaboration of the research institution and get profit from their work.
The US Department of Agriculture administers and funds the Rural Business Development grant program that offers financial opportunities to help small businesses strengthen and grow in rural communities.
Businesses must have annual gross revenue of less than $1 million and less than 50 employees to be eligible for this grant program. You should make sure you are running a small business within an eligible rural area to qualify.
SBA or US Small Business Administration do not provide grant opportunities for small businesses directly, however the Program For Investors And Micro-Entrepreneurs provides federal grants to eligible micro-enterprise development organizations so that they can provide financial support for disadvantaged micro-entrepreneurs.
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HUBZone Program
The HUBZone Program helps small businesses or underutilized businesses. The businesses that join the HUBZone Program can also compete for the set-aside contracts and along with it, they can receive the preferences from the others. With this, businesses can get dupport and also make their place in the industry with their entity.
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8(a) Business Development Program
The 8(a) business development program has the aim to help the small businesses that are owned by socially and economically disadvantaged entities.
The advantage of this program can be taken by limiting the competition for certain government contracts to businesses when they participate in the 8(a) business development program. But to participate in that program, the business must be a certified 8(a) entity.
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State And Regional Government Grants For Small Businesses
STEP is a program that aims to help small businesses that want to export their products. They offer their help to small businesses by providing them funds.
The program helps businesses to participate in foreign trade missions and shows, obtain entry to foreign markets, and develop websites. design international marketing products or campaigns.
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Economic Development Administration (EDA)
The U.S. Department of Commerce has lots of parts and one of them is EDA. This offers ongoing funding opportunities for the projects. They offer funds to the projects that work for regional and national economic development. If someone needs the grants or funds then they can apply for the various rolling-basis EDA investments.
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Minority Business Development Agency (MBDA)
The MBDA offers several grants and loans to help small businesses that are related to minority businesses. They have targeted grants and loans that are designed to offer help the whole year to minority-owned businesses. You can visit the website MBDA.gov.
Small Business Development Centers available in local areas in America offer financial support to aspiring entrepreneurs and small businesses.
They collaborate with the state economic development agency or local university to help people with small business grants. You can also access business financing opportunities like training, technical assistance and free counseling.
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Small Business Grants For Women And Veterans
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The Service-Disabled Veteran-Owned Small Business Program
The small businesses that are owned by service-disabled veterans, can get help from the federal government. The federal government annually offers them at least 3% of the federal contracting dollars to such businesses. For that business must be at least 50% owned or controlled by one or more service-disabled veterans.
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Women-Owned Small Business (WOSB) Federal contracting Program
There are lots of small businesses that are owned by women. But they do not get a proper place in the industry. By this SBA program, the Office of Women’s Business Ownership provides support to women entrepreneurs.
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Amber Grant Foundation
Amber Grant Foundation offers help and supports women. They have the simple goal of supporting the women entrepreneurs in the industry. In 1998, the Amber Grant Foundation was founded by WomensNet. This foundation awards $10,000 to women entrepreneurs each month. Apart from this, they provide $25,000 to women with a compelling story.
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Comcast RISE
Comcast RISE intends to help small businesses and owners with marketing and technology services and also come with their makeovers.
For this grant, the businesses should be at least 51% owned and operated by people of color. For this, one can visit the website or webpage of the company and there look for the complete information.
Small Business Hardship Grants
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GoFundMe Small Business Relief Fund
GoFundMe’s Small Business Relief Fund will match with the $500 grant to qualify for the small businesses grant. But they also try to collect or raise the amount of $500 through the GoFundME campaign. This fund is supported by GoFundMe and many other corporations also. Those corporations included GoDaddy, Intuit QuickBooks, Bill.com, and Yelp.
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Doordash Restaurant Disaster Relief Fund
According to Doordash, when any disaster happens, restaurants and small businesses have to face a loss of an average of $3,000 every day.
For the businesses that are affected by natural disasters, the Doordash works in partnership with Hello Alice, so that they can help those small businesses. Doordash offers the fund of $10,000 to the affected small businesses.
The Etsy Emergency Relief Grants worth $2000 are available to eligible small businesses. The applications are accepted on a rolling basis and funds are provided to businesses quarterly.
Etsy has collaborated with Cerf+ nonprofit organizations to provide sellers with financial assistance if they are affected by federally declared natural disasters.
The Small Business Readiness for Resiliency Program is an initiative that is designed to assist small businesses in preparing and recovering from sudden disasters.
You need to have less than 500 employees to qualify for this small business hardship grant. Emergency relief funding from this program is available for up to $5000 to recover disaster-associated losses or damages.
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Miscellaneous Small Business Grants
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500 Global Flagship Accelerator Program
The small businesses and startups that need the funding can look for this program. They can do this on a year-round basis with the 500 Global Flagship Accelerator Program. In addition, apart from the $150,000 investment, they also offer the four-month accelerator program in San Francisco to small businesses.
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Halstead Grant
The Halstead Jewelry Grant is given to small businesses that are doing work for jewelry creators. For the start-up capital, they offer a grant amount of $7,500 and for merchandise, they offer the award with $1,000. You can visit their website, to know about the grant program and to check for the eligibility criteria.
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National Assistance for the Self-Employed (NASE) Growth Grants
According to the website, the NASE distributed the amount of $1,000,000 to their members. They offer this grant amount to them so they can grow in the business. They offer the amount for Growth grants up to $4,000 to help the people with marketing, training, and more things that can help the businesses to grow fast.
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SoGal Black Founder Startup Grant
SoGal has partnered with numerous sponsors to create this grant opportunity. They create this grant opportunity for black-women entrepreneurs and non-binary business owners. This grant offers help to black women and non-binary entrepreneurs to get help with the amount of $10,000 in cash.
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SCORE
The score is the one that helps to assign a volunteer for a business mentor. Along with this, the one who can guide the different topics such as funding and operations.
The annual grant competition of FedEx provides assistance of up to $300,000 to ten small businesses as well as a $300 grant and $1000 in FedEx print credits to winners. You need to show a valid FedEx business shipping account number to apply and have less than 99 employees.
Small Business Growth Fund is a partnership between Hello Alice and the Global Entrepreneur Fund that assists small business entrepreneurs in growing their operations. The program offers grant awards ranging between $5000 to $25,000 for US-based for-profit businesses having less than $1.00 million in gross revenue.
America’s Top Small Business addresses the contribution of small businesses and companies to the growth of the U.S. economy and provides grant awards of up to $25,000. The competition offers awards to businesses in various ways such as green or sustainable businesses and emerging businesses with associated prices.
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What Are The Top Government Small Business Loans?
SBA Express loans have short turnaround times and are designed to assist small business owners who need funds quickly. The loan amount available through this resource is up to $500,000 with flexible repayment terms in the range between 7 to 25 years.
The interest rates on SBA Express Loan may differ between 4.58% to 6.5% and express revolving lines of credit are available for up to 10 years. SBA express loans are an excellent loan option for small business owners who need finance quickly.
There are SBA 7(a) loans available to small business owners up to $5 million. The repayment terms of the loan vary depending on the borrower’s purpose of obtaining the loan. The loans are flexible and can be used to cover a variety of purposes starting from purchasing new equipment or property to starting a new business venture.
On financing real estate property with this loan borrowers can qualify for a maximum repayment term of up to 25 years. The interest rates on the loan may range from base rate plus 2.25% to base rate plus 4.25% based on the loan amount and terms of repayment.
Small business owners can obtain SBA Microloans to reopen, rebuild, improve, enhance or repair their businesses. Loan amounts up to $50,000 are available while the average SBA micro loan available to small business owners is $13,000. The repayment term is up to six years with varied interest rates ranging between 8% to 13%.
It is important to keep in mind that you cannot use the microloan fund to pay the existing debt or to purchase a real estate property. The qualification requirements may vary depending on the lender however it takes a few days to weeks for approval.
CDC 504 loans or SBA 504 loans assits small business owners to secure funding opportunities for creating or growing jobs in the market. Certified Development Companies administer the program and offer 40% of loan funding while credit unions and private banks fund 50%. The last 10% has to be covered by the borrower with the down payment.
Loan amounts can range up to $5 million and with repayment terms set at 15 years for equipment and 25 years for real estate. These loans help small business owners to purchase fixed assets like long-term equipment for machinery or real estate and modernize their business existing facilities.
Small businesses that have suffered economic loss or physical loss because of a federally declared disaster can obtain SBA Disaster Loans. In some cases, these loans are available to business owners who are unable to obtain credit from other sources.
The Economic Injury Disaster Loans are available to small businesses, private nonprofit organizations and small agricultural cooperatives that have suffered substantial economic injury because of a disaster and a loan amount of up to $2 million is available.
The repayment term is up to 30 years with a rate of interest capped at 4% every year. Businesses are required to use the fund for covering the operating expenses and meeting the financial obligations.
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Conclusion
Government small business grants and loans provide financial assistance for existing small businesses and startup companies including those who have been affected by disaster or other hardship. The difference between small business grants and loans lies in the fact that small business loans have to be repaid by business owners with certain interest after a particular period of years whereas small business grants are completely free and are not required to be repaid. Small business owners must research thoroughly and apply for grant funding that aligns with their needs.
Learn about the Native American Small Business Start Up Grants at the Get Government Grants blog section. Our resources will help you to improve your living situation and help you in times of your need.