One of the biggest needs for most small businesses is cash which provides a small business the flexibility to allocate resources in the ways that are most needed. Although loans and investors may be effective ways to obtain the liquidity needed for a small business, there are some drawbacks to these options. Loans will cost you money in interest fees while taking on more investors in the business may cause conflict if you end up not agreeing with your new business partners on certain business strategies.
Alternatively, you may want to consider looking for small business grants. These can be found from the government or private corporations. There are even grants designed particularly for businesses in the startup phase.
Government small business grants
As a small business you may be eligible for numerous grants at the federal as well as state and local levels of government. You can find a comprehensive list of small business grants from various federal government agencies on Grants.gov. If your small business engages in research and development for scientific research and technology innovation you may qualify for grants from the Small Business Innovation Research (SBIR), or the Small Business Technology Transfer (SBTT) programs provided by the federal government. If your small business is based in a rural community, you may want to see if you qualify for a grant from the U.S. Department of Agriculture (USDA).
State and local regional governments also offer various small business grants you may want to take a look at. Each state has an economic development agency which may be offering small business grants your business may qualify for. Also, there may be a local Small Business Development Center (SBDC), usually connected with a university or state agency that can help guide you through the process of finding grants for your small business.
Corporate grants for small businesses
Many private corporations provide small business grants as a part of their philanthropic endeavors. If you are a member of the National Association for the Self-Employed (NASE) then you can apply for monthly small business grants of up to $4,000 as well as other grant opportunities. FedEx is one large corporation providing grants to small businesses and holds a contest to choose ten winning small businesses to receive grant funding. Visa, Venmo and Lenovo are several other large corporate sponsors for small business grants.
Grants for startup businesses
There are grants specifically tailored for helping start a new business. For example, the U.S. Chamber of Commerce offers grants for small businesses which have only been in business for a year or less via its Dream Big Awards program. Various private corporations, such as DoorDash and Progressive also offer opportunities for small business startups to obtain grant funding.
Being financially smart with your grant funding
Once you have received grant funding you will have to implement the actual utilization of the funds to enhance your business venture. This requires you have a clear financial strategy in order to put the funds to work in an effective manner. Talking with a financial professional can help you formulate this strategy.
Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision.