Here’s How to Get Free Money for Your Business
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Grants have helped many businesses affected by the pandemic. Between the federal government, state programs and private organizations, small-business owners have received billions in funding they won’t need to repay.
This aid may dry up as the country shifts from relief to recovery.
“I think we are coming toward the end of this type of funding,” says Annie Donovan, chief operating officer of the Local Initiatives Support Corporation, a New York-based not-for-profit that’s provided more than $200 million in grants via COVID-19 relief programs.
But if you’re still looking for free money for your business, other small-business grants may help meet your needs. Here’s how to get them.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Understand what's available
Business owners affected by the pandemic can try for federal grants, for now. The Shuttered Venue Operators Grant program, which launched in April, is open to businesses like movie theaters, museums and performance halls until its roughly $16 billion is exhausted. Applications have closed for additional grant programs like the Restaurant Revitalization Fund.
Some states continue to roll out their own grants as well. For example, the now-closed Wisconsin Tomorrow Small Business Recovery Grant program launched in May.
For non-COVID grants, the federal government is also a main source, providing hundreds of billions of dollars every year, according to Grants.gov, a government-run database of these opportunities. These awards have strict qualifications, though, so review your eligibility before applying.
Private and corporate grants may be accessible to more business owners. But there are fewer of these, and large awards have plenty of competition.
For example, the 2021 FedEx Small Business Grant Contest, which offered a grand prize that included $50,000, exceeded 8,300 submissions — more than double the 2020 competition.
Watch for opportunities
For federal small-business grants, visit Grants.gov. The website, managed by the Department of Health and Human Services, lists more than 1,000 awards.
State-based and corporate awards can be tougher to corral, especially as many have quick deadlines. For example, the application window for the Wisconsin Tomorrow Small Business Recovery Grant was just two weeks.
One resource that may help is GrantWatch, according to Frank LaMonaca, chairperson of the southeastern Connecticut chapter of SCORE, a nonprofit organization that helps business owners nationwide.
“It’s agnostic to whoever’s offering (funding), whether it’s private or public,” LaMonaca says.
GrantWatch charges a subscription fee for some services. With more legwork, you may be able to find untapped opportunities for free by connecting with your local SCORE chapter or Small Business Development Center.
Private grants may also recur. If you’ve found a good fit but missed the deadline, set up a reminder to apply for the next round.
Hit the right notes
LaMonaca says many grant applications require short answers about why you need the money and how you’ll use it. You also may need to provide details like a business plan and financial statements.
A winning application will use this information to tell a compelling story.
“It’s important to show that your business doesn’t need to be saved,” says Stephanie Duncan, co-owner of Harmony Harvest Farm in Weyers Cave, Virginia.
She adds that it’s critical to have a focused plan for the award and remember that grantors want to see their money “evolve into something amazing.” Harmony Harvest Farm was a third-place winner in this year’s FedEx Small Business Grant Contest.
Other tips are simpler — like completing the application and sending it in on time.
Randy Scarborough, vice president of global customer engagement marketing at FedEx, said by email that the company’s contest typically has “a handful of businesses that miss deadlines or are disqualified,” usually for not meeting a requirement.
Beware of scams
Getting free money can often sound too good to be true. In some cases, it might be.
Before applying for a grant and providing information like a Social Security number or employer identification number, ensure its validity. Red flags may include a fee or an application requiring nothing but your personal or business information.
Donovan says to watch out for phishing scams, in which fraudsters reach out impersonating an organization such as LISC. Scrutinizing email addresses and URLs can help ensure you’re dealing with a legitimate grantor.
Also, keep track of any small-business grants you apply for. That way, you won’t be surprised — or suspicious — when you’re contacted about winning.
“Sometimes we have to call (recipients) three times,” Donovan says. “Some people have not taken the money, unfortunately.”
This article was written by NerdWallet and was originally published by The Associated Press.
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