Ask any entrepreneur or small business owner what their primary issue is in business and 80% will tell you one thing—money. Whether in terms of customer patronage, equipment or expansion, it still boils down to funding. This is why the competition for grants, loans and investors is constantly on the rise with more and more qualified candidates emerging with each batch. The downside to this, however, is that there just isn’t enough money to go around – especially free money like business grants.
Whether you have a business idea and you need funding to start up or you have an existing business and can use some extra money for operations and equipment, the good news is that there are many ways to access funding from government agencies and/or private philanthropy organizations all over the world and with the right pitch and some luck, you can bag yourself business grants to actualize your dreams.
This article will be explaining in detail, the processes you will have to take and how to get small business grants.
Table of Contents
What Is A Grant?
Grants are non-repayable monies or products that are given by one party—the grant giver—to a recipient, typically a non-profit organization, educational institution, business, or an individual. The grant giver may be a government tier(federal or state), corporation(national or international), foundation, or trust.
Grants don’t have to be repaid, unlike business loans; they are given to you with no explicit expectation of payback, so you don’t have to worry about term length, interest rates or rollover, APR, or refinancing. Simply put, if all conditions are met, you do not repay.
The majority of business grants are created to serve a socioeconomic goal for a community, which may include any or all of the following: to mitigate the effects of unemployment, to foster innovation, production and industrialization.
Step By Step Guide On How To Get Small Business Grants
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Research Grant Programs And Apply For The Best Fit For Your Business And Goals:
When looking for business grants, it’s important to know what type of grant you are applying for and how that program works.
There are a number of places you can go to research on available grants and how to apply for them.
Generally, the Internet is a great place to begin your research for funding opportunities. There are countless online resources that discuss different types of funding available through local governments, private organizations and banks but you cannot know them(or apply for them) if you don’t even know they exist!
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Know Your Eligibility Requirements:
Small business grants have very strict eligibility requirements. It takes time and energy to do the mounds of paperwork required for one grant application and you’ll probably not have the funds to hire someone who will be fully dedicated to the grant-writing process so it is important that you ensure your business is fully eligible before proceeding with the application.
In summary, check carefully for the eligibility requirements of any grant before you start the application process.
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Get The Required Paperwork Together:
The next step after confirming the eligibility requirements is to get the required paperwork together. Most of the time, you will be asked to submit your business plan, financial statements and some other documents that will be stated.
Some business grants has strict guidelines on how much and what information they want to see before approving your application.
On a general note, the following details are almost always among the information required for any grant you apply for:
- Your name and contact information (email address and phone number).
- Your business’s name and address.
- A list of all employees who work at least 20 hours per week for the company over the past calendar year.
- An overview of your business’s products and services, including current inventory levels.
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Plan And Structure Your Small Business Plan/Proposal:
The next and most vital step to getting a small business grant is to write your business plan. This document shows potential donors how much value their money would bring into play. If you’re not familiar with the process, this will be your chance to explain why you need the money, who your target audience is and how not only they can benefit from what you offer but the society at large.
This means that you have thought about how and where the money will be used, along with other details like short and long term plans for the money and percentages to be allocated to different aspects of the business.
In light of this, you will need to create a budget—you should know exactly where every penny will go before applying for funding because inadequate information provided about costs and revenue projections can serve as a turn-off to whoever reads your business plan.
Once everything has been organized and thoroughly thought out, it’s time to go ahead and put together the proposal proper that will be presented along with other documents for the application.
Things To Include In An Excellent Business Plan/Proposal
- A business proposal cover letter explaining why you’re the best person to get the grant.
- Analyze how likely it is that your small business plan will succeed.
- Analyze the target market for your product.
- Analyze the strengths and weaknesses of the competition in your industry and how they operate.
- Estimate the cost of producing and distributing your product or service, including marketing costs, production costs, distribution fees and sales commissions. This can help you determine whether it’s worth continuing with your business plan if there are no financial returns at this stage—or if any money would make all that work seem worthwhile.
There are so many small businesses out there trying to access grant funding just like you which means the competition can be intense. Knowing the strengths and uniqueness of your business and tailoring your business plan to highlight and leverage on them can ensure you and your business are better positioned during the application process.
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Crosscheck Your Application Package And Ensure It’s Complete:
Be sure to submit a complete application package with all the necessary materials.
If you want to get a small business grant, you need to make sure that your application is complete and all the necessary materials are included in the package. You should include:
- Proof of ownership for all assets owned by your company (for example, bank statements and deeds).
- A complete financial statement showing how much income has been generated so far, including any loans taken out against future earnings or profits. It should also include details on what expenses were incurred during the time period and whether they had any impact on profitability.
- An up-to-date list of key staff members who will be working with them throughout the project’s lifespan (including their names and contacts), where they work now (if applicable); this information can help firms qualify for funding because it shows what kind of expertise exists within those departments’ ranks.
Top 10 Small Business Grant Programs In Nigeria
- Lagos State Entrepreneurs Trust Fund (LSETF).
- AYEEN Financial Grants.
- Diamond Bank BET Programme.
- Bank Of Industry (BOI).
- YouWIN Connect Nigeria.
- Tony Elumelu Entrepreneurship Programme (TEEP).
- CBN Creative Industry Financing Initiative.
- African Women Development Fund.
- Shell LiveWire Funding.
Final Thoughts
Grant application can be a complex process, so it’s important to have a plan in place. By following these steps, you’ll not only improve your chances of success, but also learn what it takes to get small business grants.