Many low-income households establish small businesses to improve their ability to make money. Sometimes, a low-income family might struggle because someone’s current line of work isn’t profitable or viable enough. However, there are many opportunities for those people to start their small businesses, especially if they have the ideas and understanding of how to get a business ready.
The problem with starting a small business is that it’s often hard to get the funds necessary to run the effort. You’ll require thousands of dollars to get a business working. Those funds are necessary for everything from setting up an online presence to getting the inventory you need for your business to even hiring people. Those costs can add up, and it’s difficult for low-income business operators to cover all those costs.
The good news is that you don’t have to worry about those expenses when searching for small business grants. Grants are available for small business startups, including ones run by low-income residents.
Various grants are available for new businesses looking to make an impact. These grants are designed to support economic growth and competition nationwide.
There are still rules to follow when getting a grant for your small business. Each grant will have specific terms for what you can do and how you can use the funds, so reviewing those grant terms is a necessity.
A business grant is a financial award given to a group that wants to reach various goals. The award consists of funds that can help a business manage operations.
The funds you’ll receive in a grant will vary, but you won’t have to pay anything back. A grant is not like a loan because whoever is providing you with assistance is not asking for you to return anything.
However, you will have to use the funds you earn in your grant for whatever the specific purpose may be. For example, if your grant is designed to help you hire new workers, you’d have to use the funds to cover the hiring and payment process for those people.
Grants can work for very specific aspects of running your business, so looking at what your grant is intended for is necessary. You may find it won’t be challenging to cover many aspects of your business when you have a grant to cover something.
The total amount you’ll get in a grant will vary by option. Some grants are worth a few thousand dollars, but many more competitive ones can offer five-digit ranges.
The funds you’ll earn can work for many processes, but you’ll also have to review how much you need from a grant before applying. A general search for grants online can reveal various options that cover many expenses.
Some grant listings include a grant ceiling and floor. Here’s a look at what these terms mean regarding what you can earn:
The grant provider can determine what you’ll get from your grant through your application. You’re more likely to qualify for whatever the award floor is, but be sure to provide detailed and accurate information, as you could still receive the ceiling amount.
The good news about finding small business grants when starting yours up is that you don’t have to search hard to find something. You have multiple options to explore when finding grants:
You may find different grants through different federal government sources. Grants.gov provides a thorough database of grants available for various purposes.
You can also check with your local government for info on whatever grants are available. States have many programs where you can find grants. For example, North Carolina has a thorough series of grants for different projects. Meanwhile, the state of Alabama has different grants through the state’s Small Business Development Center.
Each local space has different grants for various purposes. Be sure when finding these grants you’re looking for ones dedicated to whatever specific things you want to do for your business.
You can also contact the Economic Development Administration for help finding grants in your state. This organization offers info on how to reach different state and regional organizations willing to provide grants. Local Small Business Development Centers can also help you as needed.
Many more prominent grants come from industry-specific groups that focus on small businesses catering to particular fields. For example, the Rural Business Development Grant is available to people in rural communities through the Department of Agriculture. The Small Business Innovation Research program is for those focusing on technology-specific efforts.
There are a few philanthropic parties out there that offer small business grants for low-income households. These grants are typically worth a few thousand dollars and are for new entities.
Organizations like the National Association for the Self-Employed and the Chamber of Commerce CO-100 provide grants year-round. You can apply for grants through these groups, but the competition may be tight.
Many corporations offer grants to new businesses, although many of these groups focus their grants on specific aspects of running a business. For example, Verizon offers grants through its Digital Ready program that focuses on helping you get the technology needed to run your business and communicate with others.
Many corporate grants are alluring, but competition for them is intense. One instance involves the Venmo Small Business Grant program. While you could get a $10,000 grant from Venmo, only twenty business owners can earn it yearly.
Remember when looking for grants to avoid places that require you to spend money to obtain a grant. Sites that claim to offer guaranteed grants for all applicants are also dangerous.
In addition to these sites being scams, they might also ask for more info about you than necessary. These places might request a credit card number or bank account info. Any place that requests more info or details than necessary will be dangerous.
You can apply for your small business startup grant after you find one that interests you. You will require various documents and details on how you’ll use that grant and what your business is like beforehand.
Here are some steps for how to apply for a grant:
Compare the terms with your goals for your grant. Anything that matches your overall goals will work best. Various online databases can help you sort through grants based on their values, industries, and other factors of use for you.
After you check the terms, you can submit your application for the grant. Your application will require a few points:
Your application will be more likely to be reviewed if you provide as many details as possible. Be sure to also proofread your work while removing possible inconsistencies, as failing to do this might disqualify your application.
Grant providers have multiple deadlines for applications based on when they are providing funds. Review those terms when getting your application ready.
The timing for when you’ll get an answer surrounding your grant application will vary based the deadline and how many people apply. You should get a tracking number connected to your application to help you see how it is being processed.
You’ll need to review the terms of whatever grant you apply for to ensure you know what to do with your funds. Here are some common points to review in your grant:
Every grant provides specifics on what you can do with your funds. Check those terms to see what you can use the money for.
You might have to provide reports on how you use the funds in your grant. General reports can include info on your financial efforts and how you are working to establish your business. Your terms can provide specifics on what reports you’ll need to provide.
You will likely require a separate bank account to which the grant money will go. Sometimes, that account could be a separate ledger within an existing account. That added ledger will keep your grant funds away from other assets, ensuring you can keep tabs on how you’re using those funds.
You’ll also need to report on your grant to the IRS. You’ll file your grant income under Form 990-PF. The form requires you to include info on the amount of your grant, who provided those funds to you, and the purpose of that grant.
You’ll be expected to use your grant funds within a particular timeframe. The terms should include points on that timeframe and what to do if you don’t use the funds before it ends.
You will have to agree to whatever terms apply in your grant before you receive that assistance. Be sure you carefully check all the terms to see if the grant you want is suitable for your needs.
Failing to follow these grant terms could require you to return the funds you got from that grant. You might also have to pay back interest on those funds. Check the rules in your grant to see what the risks are before agreeing to it.
There might be cases where you’ve got leftover funds from your grant. You might have funds left because whatever you need to acquire might not be as expensive as planned. Maybe you might have made some changes to your business plan to where you didn’t need as many funds.
Depending on what your grant states, you might have to return the unused funds from your grant before the grant period ends. Not all grants require you to do this, so check the terms.
Small business startups are exciting for how they offer many new ideas. These businesses help local economies keep running, plus they allow for plenty of regional competition.
More importantly, a small business can be a person’s key to having a stable income. When planned and run well, any low-income person could start a small business and earn enough to be financially afloat.
But the work for getting your business ready is extensive, and you’ll have to spend money to make it work. Small business startup grants will help you get the funds needed to go forward with your business plans.
Be sure when finding grants that you’re looking for ones that fit your business needs. Have a plan for how a grant will work, and check all the terms for whatever you apply to use. Reviewing all these details is necessary to succeed in going somewhere with your work.