Whether your existing small business is financially struggling or you’re looking to start a new company from the ground up, you might be in need of a little extra cash. If you are in need of financial assistance, a small business grant could help.
Small business grants are a type of financial assistance that are specifically designed to support both existing and new small businesses as they navigate financial hardships—or the baseline challenges of opening a local business.
If you’re looking for more information, you’re in the right place. Below, we’ll explore the following topics:
A small business grant is a sum of money provided by a state, federal, or private entity to qualifying small businesses—you don’t have to pay them back, but you do have to apply for them.
Grants are, essentially, free money.
But, the amount of money your small local business can receive from a grant varies based on multiple factors, including (but not limited to):
Let’s take a look at some grants currently available on the market to give you an idea of how much to expect when you apply for a grant:
Grants and loans both help small businesses. However, one crucial factor distinguishes the two. Loans have to be repaid to the lender after a specified period of time, often with interest and a hefty collateral attached, should the borrower fail to pay.
But with grants, you don’t have to pay the money back.
The distinction makes grants incredibly valuable during the current recession when small businesses have been distinctly impacted by inflation. In their 2022 Small Business Index, the US Chamber of Commerce found that:
Which begs the question: Does your business qualify for a small business grant?
Before applying for a small business grant, ensure that the grant-giver considers your business a small one.
According to the Small Business Administration (SBA)—which gives out several vital small business loans and grants—what constitutes a small business is described as follows:
“Size standards define the largest size a business can be to participate in government contracting programs and compete for contracts reserved or set aside for small businesses. Size standards vary by industry, and are generally based on the number of employees or the amount of annual receipts the business has.”
Input information on your company using this convenient tool to determine whether you fall into the SBA’s size standards for small businesses.
Aside from size, grant opportunity qualifications vary depending on the lender, the state, or the country.
Here are some of the most common small business grant eligibility requirements, including a few specific examples:
To ensure that you receive the most relief possible, conduct a comprehensive search of the government grant programs available in your area. Some may come from private entities like Facebook or Amazon, others from your state, and others from federal grant programs through providers like the SBA CARES Act.
While forgivable loans became more prominent at the advent of the COVID-19 pandemic, some lenders still offer them. For example, the Vermont Economic Development Authority (VEDA) began administering the Short Term Forgivable Loan Program in November of 2022 to help small businesses overcome prolonged financial hardships resulting from the pandemic.
If your small local business meets the criteria for a forgivable business loan both at the time of the application and at the time of forgiveness, a forgivable loan becomes, essentially, a grant—free money that your small business doesn't have to pay back.
Criteria for forgiveness varies lender-to-lender, but in the case of the VEDA loan mentioned above, small businesses must meet the following criteria to qualify for forgiveness:
The funds from this forgivable loan must also be used for limited, specific applications—this is often the case for such loans.
On top of the SBA, you can receive small business grants from federal, state, and corporate entities across various industries. While many of these grants may seem intimidating due to their comprehensive application processes, they are worthwhile opportunities for small businesses that want to survive—and even grow—in this challenging time.
Many entities also reward small business grants for women and minorities. Some of these funding opportunities are more traditional grants with applications, while others take the form of entrepreneurial competitions.
Let’s explore how to apply for a small business grant.
While application processes vary from grant to grant, most share similar steps and eligibility requirements. To optimize the amount of grant money you receive, compile a document of pertinent information required by most federal grant programs.
Here are some common details that grant funding applications require you to specify:
Even though grants seem like money that grows on trees, they are by no means low-hanging fruit—you have to work hard and be as detailed as possible to ensure the best outcomes for your small local business.
On top of filing for small business grants, small businesses need to be doing everything they can to support and communicate with their customer base. Neighbors and locals are the lifelines of a small business, and right now, it’s important to be communicating everything from your operating hours to your implemented safety measures.
This will open channels of dialogue, allowing word of mouth about your business to spread.
To help with this, there’s Nextdoor.
According to a survey of Nextdoor members, 70% of consumers turn to word of mouth from neighbors to discover new local businesses, while 88% shop locally at least once a week.
So while securing grants will help keep your small business afloat, it’s crucial to consider the next steps of recovery. That includes focusing on business growth and reconnecting with your neighborhood and the customers that live in it.
With Nextdoor, you join the neighborhood hub and increase your visibility to consumers within your local community. Your Nextdoor Business Page lets you plug into the local conversation through customer recommendations, promotions, and marketing. With Nextdoor, local small businesses can get out the word about their reopening or changes to their small business, for free.
Don’t miss out on your most valuable potential customers—the people in your neighborhood—and claim your free Nextdoor Business Page today.