Small Business Grants – What Are They and How Do You Get One?
More people than ever are launching businesses these days, and you could do the same. Sick of your 9-5 desk job? Tired of your boss being on your back the whole time? The solution could well be to start a business of your own. How great would it be to have the freedom to do whatever you want, whenever you want? You can take control of the direction of your company, and shape your own destiny in the process. But, running a small business is no cake walk, and you need to know what you’re getting yourself into before you launch.
However, a lot of people are put off when considering starting a business because of the costs involved. It can be very expensive, and you’re largely going to need to stump up the costs yourself. Too many people underestimate the cost of running a startup, and that’s why so many fold in the first two years. So it’s important to think about how you can raise money to fund your small business. There are a number of ways you can do this, and some are more preferable than others. If you are concerned about the financial side of things, you need to learn a bit more about small business grants.
What are Small Business Grants?
A business grant shares a lot of similarities to a business loan, but also some important differences. If you are planning on applying for small business grants you need to understand what you’re getting into. So what is a business grant? Well, in layman’s terms, it is a sum of money awarded to a business to help it with a specific purpose. This can prove to be invaluable for many business owners, especially those struggling to raise funding a financing themselves.
One of the major positives with grants and something that makes them different from loans is that the business does not have to pay the grant back. You can see how this can be really helpful in getting small businesses off the ground. There is no repayment, no interest, and you don’t have to give away equity. It’s a sum of money awarded to the company for a specific purpose. However, you have to make sure you use the money for the purpose it’s intended. If you don’t, then you are in breach of the terms, and you will be expected to repay the money.
Securing a Small Business Grant
As a business owner, one of your main aims is probably going to be to try to secure small business grants. This is done in much the same way as applying for a loan, i.e. you go online and find sites that allow you to apply. We would suggest visiting here (England) or here (Scotland) or to find out more information on applying for grants. There are also plenty of sites online where you can go and fill out an application for small business grants. It’s best to do a bit of research first and see where you might be able to get accepted more easily. Going through the government is one way of doing it, but companies like Virgin also offer entrepreneurs the opportunity to benefit from grants.
You will have to make sure you have planned or thought about things in advance when it comes time to apply for the grant. This isn’t just a quick five-minute process, and everything’s over with. You have got to be detailed and determine exactly what you’re going to be using the grant for. Check your eligibility online first; that means looking at the size of your business, the industry you’re in, and what the grant is for. Don’t forget; you can’t spend your grant money on anything you choose, it has to go on what you said it would be spent on.
Positives & Negatives
The positives of getting small business grants should be pretty obvious. We have already looked at some of them earlier, predominantly the financial support of getting a grant. But there are other positives as well that we didn’t touch on before. For instance, being awarded a grant gives a good impression to banks for future loans you may need. It also gives you a structure and timeframe to work within, keeping your focus as a brand. When you acquire a grant, you become validated as a business, and you’re now a true player in the business world. It will help you fulfill all your business dreams and turn your company into a strong, successful brand.
However, there are also drawbacks to small business grants as well, and you need to know what these are. For instance, for a lot of government grants, you have to be able to come up with some of the money yourself. You’re also often going to need to complete a percentage of the project before you receive the money. There is a limit as to what you are allowed to use the money for, though this is clear from the start. Also, much like the business world, you can expect it to be very competitive. There are so many companies applying for business grants, you need to know where to begin with them. And, in order to be accepted, you will usually need to show how your project will benefit the community or the environment.