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Starting a business is never an easy task. It takes time, patience, effort, and of course, money. Finding resources can be difficult, but you can make something big once you do.
If you look at some of the wealthiest people in the world, you will notice that they began with some capital to get their ideas off the ground. Fortunately, there are many ways to find free money to start a business. Some people invest in start-ups to help them grow, while others lean into securing small business grants.
What is a Small Business Grant?
In 1995, Jeff Bezos got his parents to invest around $250,000 to help him start Amazon. With that initial investment, Bezos realized his dream. However, not all are fortunate to have angel investors, old money, or parents to invest in your brand-new business. For those of us that aren't, there are small business grants.
A small business grant is free money to start a small business, start-up, or project funded by the government, non-profits, or other organizations to help. The grant money generally does not need to be paid back, but the organization supplying the grant money usually requires goals to be met and requirements to see progress.
You must look for different grant initiatives and organizations that help receive some grant money. One of the most popular places to search for grants would be the U.S. Small Business Administration. It is an excellent place to start searching for grants to get free money to start a business.
Many Different Grant Types
Various organizations have grants to help people get started. They are separated by different types and levels within the government. Each place is an opportunity to find free money to start a business.
Federal Small Business Grants
The Federal government can be the first place to look for some grant money. There are various grants you could apply for. If you want free money to start a business, you must do the work to get the grant money. Do not worry if the job seems a little bit daunting. Take advantage of the opportunities and apply for the grants.
The Federal Government has a couple of places to look for grants.
- Grants.gov: Grants.gov is an extensive database of federal grants across the various agencies in the government, such as educational grants, local government grants, non-profits, and other organizations that may be offering grant money.
- Small Business Innovation Research Program (SBIR): It is an award-based competitive program that seeks to find for-profit businesses located in the United States, owned and operated by at least 50% of U.S. residents or citizens, and have fewer than 500 employees. They are enabling small businesses to receive government funding for research that will allow them to seek out the commercialization of their products.
- Small Business Technology Transfer Program (STTR): They help fund research and developments like the SBIR but need the business to collaborate with the research institution formally.
- USDA Rural Business Development Grants: The USDA uses grants money to help small businesses in rural areas develop and grow. There are requirements such as less than 50 employees and less than $1 million in gross revenue per year.
State and Reginal Business Grants
The SBA has several agencies that help provide grant money to the state and local areas. After looking at the federal level for some grants, it is always good to check out specific state grants at the state or local. Finding free money to start a business could be right around the corner at your local Small business Development center.
- Economic Development Administration: It is a U.S. Commerce agency that helps provide grants, resources, and funding to entrepreneur efforts that provide economic growth in local communities. Each state's agency gears toward helping to find financing and recruiting employees for future small businesses.
- STEP Program: It is a program designed to reimburse more than $6,000 of exports to those small businesses new to exporting. The STEP program is an example of a State or Regional Business grant helping local small businesses with start-up cash.
- Small Business Development Centers: There are many Small Business Development Centers in local communities helping small businesses with resources and funding. They usually work with local state universities or local agencies.
Covid-19 Small Business Grants
During the beginning of the pandemic, many businesses had to close their doors. The federal government and many other organizations came together to provide relief and opportunities to have free money to start a business.
- Economic Injury Disaster Loan: The SBA is giving out disaster loans to small businesses experiencing a temporary loss of revenue due to the pandemic. These businesses can include non-profits and even agriculture businesses. You don't have to repay advanced funds up to $10,000.
- Verizon Small Business Recovery Fund: Verizon is giving away money to many small businesses in underserved communities. They are giving up to $10,000 to small businesses in areas where the pandemic in those underserved communities has badly hurt.
- State and Local Governments: Many state and local governments continue giving grants to small businesses that the pandemic has hurt. Take a look to see how your small business may qualify and apply for the grant money.
Corporate Small Business Grants
Many corporations look to see how they can improve the communities around them. They are giving grants to help build up communities and small businesses globally.
- FedEx Small Business Grant Contest: The company's annual grant competition awards ten small businesses that accumulate up to $250,000. The grand prize winner will receive a $50,000 grant and $4,000 in FedEx print and business services.
- Visa Everywhere Initiative: The Visa Everywhere Initiative is a tech, forward-thinking initiative targeting start-ups offering new products that will integrate Visa services. They target five regions around the globe and will have a grand prize of a $100,000 grant to the small business that can win the competition.
- National Association for the Self-Employed (NASE): Allows applicants to apply for grants up to $4,000. Many of these recipients have been able to buy computers and farm equipment to help get their businesses off the ground.
- Fast Break for Small Business: LegalZoom, the NBA, the WNBA, and the NBA G League have provided grants and funds to the Accion Opportunity Fund. The fund would give LegalZoom services to small businesses in underrepresented communities. These grants are about $500, but they are helping to raise the small businesses in underserved areas that need assistance.
Non-Profit Small Business Grants
Numerous companies give away grants that help promote non-profit initiatives. These companies want to make a difference in the world.
- Patagonia's Corporate Grants Program: Patagonia is looking for small businesses trying to preserve and protect the environment around the world. They are looking for innovative ideas and give out anywhere between $5,000-$20,000 as a grant to those who qualify.
- Global Grand Challenges: Global Grand Challenges seek organizations that promote innovative initiatives that promote better health worldwide.
- Walmart's Grant Programs: Walmart's Grant Programs focus on organizations working on sustainability, creating opportunities, and strengthening their communities.
- Wells Fargo Grants: Wells Fargo Grants focus on giving grants to underserved communities and local non-profits that help those communities.
Specialty Business Grants
Here are some grants for particular groups of people, including veterans, minorities, and women-owned businesses.
- Small Business Grants for Women-Owned Businesses
- Small Business Grants for Veteran-Owned Businesses
- Small Business Grants for Minority-Owned Businesses
Other Ways to Get Free Money to Start a Business
Most people think about the grants that can get you free money to start a business, but there are other opportunities like opening up a bank account or getting a massive bonus from small business credit cards.
- Checking Accounts: Chase offers up to $300 for opening up one of their business Chase Complete Business checking accounts. There needs to be a deposited amount of $2,000 and achieving other qualifications to get the $300. Many other business checking accounts are offering opportunities as well.
- Business credit cards: If your business spends money, you can get cashback or even points like the Chase Ultimate Rewards Points, and that cashback and points can be valuable to your business in making the most out of your spending.
Billy Napier, football coach of the Florida Gators, once said, “Scared Money Don't Make Money.” New start-ups must spend money to make money. As business owners create ideas, innovate, and start to build, they will require funding and resources to get their vision off the ground.
With various programs offering essential funding, the opportunities and competition for these funds become fierce. It is necessary to have a well-thought-out business plan to succeed in winning some of these grants. If you are looking for free money to start a business, look at some grants and opportunities. They will help your business survive the start-up phase.
This article originally appeared on Wealth of Geeks.
Steve Cummings is the founder of the personal finance blog The Frugal Expat. As a traveler and expat, he has learned a lot about how to save money, live frugally, and invest for the future. His mission is to help people in saving, investing, and reaching financial independence.