Government loans can help businesses with purchases, including your land buying rates to the IT equipment purchase. Although there are plenty of grants available for small businesses, getting one approved can be difficult if you aren’t familiar with the procedure.
Small Business Funding has been something that most people had a difficult time getting because of credit issues and banking regulations. However the government now offers grants that help in solving funding problems. Continuing on, most of the entrepreneurs who apply for small business funding and qualify for such loans end up getting stuck with outstanding loans. To solve this problem, the government has now introduced grant programs.
However, these grants aren’t as easy to get sanctioned. There are several stages for applying for the grant and all these steps have specific requirements that you must fulfill. Mostly startups are granted loans for building the economy and increasing jobs. If you have been looking for government grants, then here is what you need to do:
- Get your business idea straight
Before you start looking for government loans, it is essential that you have your business idea ready. All small businesses are required to come up with a complete business plan along with a feasible financial report. Most of the agencies reject grant applications that don’t have a comprehensive business plan attached as it is a requirement. A business plan for any grant requires you to provide in-depth information about the business, its finances and operation.
- What is your status?
If you are a woman, disabled, amongst the minorities, veteran or American Indians, you qualify for special grants. The government of United States of America offers such individuals with special grants. So, if you fall under any of these categories then you can take advantage of it in terms of quota. If you are eligible for the grant, it is essential that you provide proper documentation of your category along with the application as a proof.
- Think about going the non-profit route
Most of the government grants are awarded to businesses that work on the model of 501c nonprofit. The nonprofit organizations also receive a ton of benefits such as monthly salary for the operators along with healthcare allowances that regular profit oriented business owners don’t receive. Let’s say you want to open a childcare center, if you categorize it as a nonprofit, you would be able to apply for several grants such as education, nutrition and welfare.
- Types of grants
The government grants are available in countless forms, it ranges from free equipment to reduced cost for startups and cash rewards. For instance, if you are looking for starting a business in an agricultural land which is going to help the economy or local market the government will have several discretionary grants for you. These grants are usually divided into three categories that you can select from, these include:
- Direct grant: if you are a startup, then you can get this money to cover up for your initial expenses. These may include the equipment, training and export costs. Depending on the kind of market that you are entering, the amounts of funds vary. Most of the grants expect you to payback 50 percent.
- Equity Finance: not exactly termed as a grant but some of the schemes offer a reduction up to 50 percent in terms of income tax. However, the business cannot be more than 2-year-old or have more than 25 employees.
- Soft Loans: similar to the grants, these loans are quite generous when it comes to interest rates. The government offers startup loans at low interest rates with mentoring and support options.
- Register with the federal government
It is essential that all applicants register themselves with the government via the official website. You can get in touch with an agency if you aren’t familiar with the procedure. After you have pre-registered with the website you will receive a username and password which will give you access to the application system.
Once you get inside the system, download the form, follow the instructions and fill it accordingly. You may need professional help for this step because you don’t want to include or exclude specific details. Another thing to take notice of is that some state grants don’t come with the requirement list so you need to ask for them.
Make sure that you write a well-crafted grant proposal. It should include the business plan, expected financial reports and operational aspects of your business. Specify everything in the form and provide required document.
It is essential that you recheck everything before submitting it. Make sure that the application form has been filled correctly and you have provided all the right documents. A single mistake can result in rejection, is it is better to be careful.
- Additional grants
If there is an optional grant form then we would suggest that you take your time to read it and fill it if required. This will increase your chances of an approval.
- Read the email carefully
Once you have submitted the application, you will receive an email from the website confirming about your submission and providing you with a tracking number. Keep this number safe because this is the only way you would be able to track your application. Read the email carefully so that you don’t miss any important detail.
If you are still uncertain about what you need to do, get in touch with Carter Funding. They can help you find sources for small business funding needs. CFC can help you with factoring so you don’t get buried under the debts. Loans aren’t something that you can easily get so obtaining professional help is advised. We hope that this article was helpful and you find adequate options for small business funding.