The Beatles sang about getting by with a little help from friends, but entrepreneurs can’t go endlessly to their close circle for assistance. Yet, there are times when a business needs some financial support along the way. Small business subsidies could be the bridge you need to keep progressing on your path to success.
What are small business subsidies? These are grants from a federal, state, or nonprofit organization that help a business grow. The great thing about subsidies? Unlike a small business loan, you are not expected to pay the funds back. So, you access money without further burdening your cash flow.
The government and other organizations offer small business subsidies to help foster entrepreneurship and support the community. Specific types of business grants will focus on different attributes. For instance, a business owner might qualify for a government subsidy for a small business by being a woman, a minority, a veteran, or by meeting other particular criteria.
So you can track down funding, this article shares the basics of small business subsidies your business might apply for by covering:
- Types of small business subsidies
- Where to find subsidies
- What you need to apply
- Top tips for landing that subsidy
Types of Small Business Subsidies
It boils down to three main types of small business subsidies: government, private, or nonprofit.
Federal, state, and local government grants tend to have an industry focus, such as scientific research, technology, or conservation. Otherwise, they will be focused on a particular population and aim to help an underrepresented group accomplish a specific aim. These grants are seldom available to start a business or to cover operational expenses. You will need to have a particular project aim in mind when you apply (more on that below).
Many big businesses want to give back to the community by supporting small business. You’ll get several benefits from this route, including access to enterprise-level input into your pitch or business plan and, oftentimes, added publicity as the enterprise will be marketing its generosity.
There are also nonprofits, often foundations with specific missions, that offer small business subsidies. The key here is to find foundations that share your mission. It’s unlikely you’ll find a nonprofit that supports any old small business. They want to help fund those that will further their goals in the community.
Where To Find Subsidies
There are many places to look for funding options. The government’s conveniently labeled website is grants.gov, and it has a mobile app. Another online database is Candid. Or search roundup articles such as this one from Value Penguin or this big list from Bench. GrantWatch also helps you find foundation and corporate grants.
Check with your local chambers of commerce, state economic development agencies, Small Business Administration Development Centers, and SCORE to learn more about regional or local opportunities.
You might also take a look at our Federal SMB COVID-19 Loans and Grants listing. Or review this list of Private and Nonprofit SMB COVID-19 Resources.
What You Need to Apply
This will vary across applications, but you can always expect to be asked to provide a finely honed business plan. Typically other requested details include:
- Time in business
- Number of employees
- Monthly or annual revenue
- Plan for the subsidy funds
- Social media handles and business website address
It’s going to be important to read the application instructions carefully. You are going to be one of many applicants. Don’t screw up your chances by failing to fill out the application properly or ignoring the specific guidelines for that grant.
You may also want to involve a grant writer to help you through the process. These are trained individuals with experience telling your story and helping you to stand out.
Top Tips for Landing That Subsidy
We already mentioned the top tip: read the instructions carefully. Applying for small business subsidies can be time-consuming, but don’t phone this in. Each grant has its own specifications—pay attention.
Research the funders’ interests first. You don’t want to invest time and resources into applying for a grant that is unlikely to come to you as you have no connection to the funders’ goals.
In applying, clearly state your objectives. You need to introduce your organization and clarify what you do and why you do it (mission and vision statements come in handy here). Outline what is it that your business needs and what, specifically, you plan to do with the subsidy.
Make sure that your supporting documents are informative and accurate. If you can tell a story about the problem your business is addressing and how this funding will help fix it, that will make a good impression. But you also need to reassure the funding organizations that you are a reliable business.
Proofread! Be sure to check again that you have completely answered all of the questions on the application. Make sure that you edit carefully to avoid asking for $5,000 when you meant $15,000 or telling the people reading your application that you were addressing loco needs when you meant local.
A professional business site can also help make a strong impression on the people making the grant decisions. Read “How To Build Trust With Your Small Business Website.”
