How to Find Grants to Start a Small Business

By Nicholas Katers

  • Overview

    The biggest issue for every small business is the search for startup funds without strings attached. A small business owner wants a financial boost from an investor, government agency or firm that will not commandeer control over his product. As successful entrepreneurs will readily acknowledge, the financing process for small businesses requires compromise by intrepid owners. Government agencies and industry groups offer small business grants to help inventive entrepreneurs find their way to the marketplace. These grants may be less onerous than loans and venture capital but owners should still understand the requirements forced upon grant recipients.
    Small business grants can help your business avoid crushing debt.

    • Step 1

      Examine the small business grants offered through your state's Department of Commerce. States like Wisconsin, California and Oklahoma use federal funds to stimulate small business growth within their borders. Your business stands a good chance of getting state grants if you focus on the next generation of local products like green vehicles in Michigan or biotechnology in Wisconsin.

    • Step 2

      Look at research and development funding through the federal government's Small Business Technology Transfer and Small Business Innovative Research programs. These programs offer federal money to promote products beneficial to the national economy through the lens of Cabinet-level departments like Agriculture, Defense and Education. The federal government does not offer direct grants to for-profit businesses, funding academic and non-profit ventures that can yield new technology.

    • Step 3

      Research small business grants designed to boost your industrial niche. Michigan's Advanced Battery Tax Credit offers grants and tax incentives to companies in the state that develop cleaner automotive technology. If your business is working in an under served niche, you stand a good chance of receiving this type of grant.

    • Step 4

      Locate small business grants while networking with potential clients at industry conferences like TechCrunch. TechCrunch hosts an annual conference of websites, application developers and other businesses that use Web 2.0 technology. These events typically offer a cash award to the best business with TechCrunch organizers giving out $50,000 to the top startup each year.

    • Step 5

      Pour over the small print on grant applications to determine the consequences of accepting small business grants. State agencies may expect monthly progress reports, control over product development and access to the first products when offering substantial grants.

    • Step 6

      Cite every grant received by your business when speaking with investors and venture capital firms. These grants act as stamps of approval from government agencies and industry groups about your business, which should alleviate concerns by private investors.
    • Skill: Moderate
    • Ingredients:
    • Business plan
    • Tip: Consult the Small Business Administration website for grant writing advice as well as small business loans for new businesses. The Small Business Administration does not administer grants but maintains a library of advice on grant writing, financing and other activities pertinent to business owners. Owners waiting anxiously for grants can pursue SBA low-interest loans that are helpful in financing small projects and production runs.
    • Warning:
    • Avoid a pile of rejection letters from state agencies and grant programs by getting your application materials in order. Create a budget for the program or product to be covered by a grant and overwhelm grant reviewers with information to increase your chances.

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