Applying for a commercial loan and opening an account at a local bank can help a business get off the ground, but it may not cover every startup cost. In such situations, tapping into personal finances or that of friends and family may be tempting, but there are funding alternatives out there. Before looking within, make another sweep of the field to make sure that state and federal grants were not missed.
Understanding grants
A grant is a conditional allotment of money made by an organization that is meant to assist in obtaining a specific end within another company. These endeavors are usually intended to help benefit the party offering the funds and are activities that the originator is not capable or interested in carrying out itself. Grant offers come with a variety of stipulations and create an oversight committee, ostensibly, that will monitor how the money is used, possibly even requesting reviews of business bank accounts.
Obtaining a grantThe Small Business Administration adamantly reminds small business owners that there are no startup grants, but there are other ways of qualifying for these funds. A non-profit company, one with a scientific focus or a company with certain other credentials may be eligible for specific funds.
As About pointed out, there are a number of government-backed grants that can be used by small businesses, so long as they agree to use the money for the purpose of fulfilling the goal of the agreement. In some cases, if a company can make a strong enough case, it may be eligible for economic stimulus grants, under the premise that the business serves as a means of increasing the financial health of the general area in which it resides.
Paperwork for grantsA carefully drafted application is essential in obtaining financing for these funds. Including a business plan can show that the requesting entity has a strong basis of operation and is not in a position of failure without the money. It should also highlight the ways in which the grant money will help current corporate projects and goals. Business 2 Community recommended obtaining a submission form and consulting with a financial advisor to make sure that all the correct paperwork is present before submission.