Federal small business grants is often a great option for entrepreneurs who need additional capital in order to finance their new or existing business. As you are probably well aware, there is more to running a business than just having a good business model, you actually have to have the funds in order to get it up and moving. The issue though is that the recession has really caused the banks to hesitate on providing loans to small businesses. Therefore, a common solution to the problem of not being able to obtain a bank loan is to look at small business grants as viable options for obtaining capital. Small business grants are not always easy to obtain, but they certainly are valuable and can make a huge impact on your business in the long run from a positive standpoint.
The Benefit of Small Business Grants
The reason why grants are beneficial is that this is capital provided to you that is viewed as “seeding” money and therefore is not repaid in most circumstances. The federal government has a decided to take a look at our government and realize that there are barriers that prevent certain minorities from being able to obtain the American Dream of being successful. For this reason, it is imperative that the government steps in and tries to provide a path of success for them by helping them in ways they can, which is financially. Still, if you are not a minority there are other grants available to you as well.
The Barriers of Obtaining a Grant
There are several things that you should do if you are striving to obtain a business grant. First and foremost you should get your paper work in early. There is typically a significant waiting time to hear any form of response once the application process is started. It could take six or seven months from the time you begin the process to actually obtaining the grant if you are chosen.
The next barrier is explaining your business. Obtaining a federal grant is bigger than simply filling out two or three pages of paper work. They want to know that you have a solid plan that can actually succeed with a business plan that is heading in the right direction. This means that you need to actually talk about statistics and other facts that will entice the reader in thinking your business is certainly going to be a success. You need to go into details about how your new business will use the grant in order to improve the direction it is going to go.
The last thing you should keep in mind is that federal grants are not simply an aspect of giving you money and never having any contact with you anymore. Instead, it is viewed as a contractual agreement between you and the government. This means that the money should be used in the ways that you described how the money would be used. Therefore, using grant finances for a new big screen television in your home is not a good idea. You will be expected to keep good records of where the money is going and will be obligated to report how your business is doing to the government. If you are an honest individual with a desire to succeed in business, federal grants are very good options for entrepreneurs.