Business Grants.

There are many business grants available, but they come in all shapes and sizes. Funds can be provided by your city council, state, or the federal government. There are also private grants and awards offered by foundations and associations.

The main difference between those kinds of grants and those provided by the federal government are that the federal grants are issued through a competitive process to businesses that have taken on certain responsibilities (e.g., keeping records, paying taxes, etc.), while the city or state grants are made directly to individual business owners.

There is no way that any city can provide enough money for every business owner in its jurisdiction, so the best way for a small business owner to obtain funding is to apply for business grants. The Federal Small Business Administration has a comprehensive database of all federal grant programs including their descriptions and application instructions. You can research local cities and counties online at www.census.gov/govs/localgov.

Unlike city grants, state grants are more likely to reflect the local economy's needs and priorities. The money granted comes from a relatively small portion of the general fund budget of state and municipal governments and is often used to supplement federal funds. There is a wide range of funding possible, depending on the size of the government, its type and how it is financed. Some states have sizable general funds while others (such as Minnesota) raise a significant amount of their money through user fees.

To receive government grants, a business must first register with the state agency, as well as obtain approval from the city. A business may then apply for a grant using its registration number and documentation verifying that it meets the criteria for funding.

State and federal governments provide many types of grants to encourage businesses in all kinds of industries. These include: 

Businesses that sell products and services in all 50 states may have an opportunity to bid on specific projects and retain funds through their state's Growth Improvement Program (GIP). The GIP program was established in 1976 to assist economic development activities by providing grants to rural areas, urban cores, or other places with limited economic activity. The program is funded through a portion of the federal government's general revenue derived from the mineral production tax and allocated to businesses by their state.

There are two main types of GIP grants: the Grant-in-Aid (GIA) and the Economic Development Assistance Program (EDAP). A business may apply for either type of grant to build or improve, but must be selected before being eligible to receive funds.

A business must seek out opportunities for government contracts on its own, as there is no central list of all available opportunities at this time.

Business grants available through the Recovery Act are available on a first-come, first-served basis. Businesses must apply and be accepted by the federal government before being eligible to receive funds. The total awards amount is a combination of funding provided to state governments, as well as funds reserved for specific categories of business, such as those in rural areas or those using biofuels. Businesses may apply for partial grants with certain requirements that are in place for each type of grant. The amount awarded is based upon their financial needs and qualified factors such as job creation, existing facilities and equipment, etc. All Recovery Act money must be spent within a three-year period unless an effort to preserve employment is included in the project's application.

Businesses may apply for grants directly to the federal government, either through the Department of Homeland Security or another agency. An application must be submitted and accepted before any funds can be received. The grant application is a fairly simple form that asks for basic information about the business along with its financial needs and projected impact upon employment. For example, if a business is applying for grant money to build a biofuel research facility, it should provide information about the facilities in place and why it is hoping to expand its operations.

The federal government awards grants based on several criteria including: 

The government guidelines also state that applicants cannot have received more than half of their total funding from the Federal Government during the last three years.

Grants and loans can provide a way for businesses to secure funding for their operations. Businesses may be able to borrow money from financial institutions, such as banks and credit unions, but the process can be time consuming, especially when a business has already exhausted all of its other funding sources.

There are some private foundations that award grants to businesses that are not-for-profit. These include: 

There are many advantages to applying for business grants. They include: 

The biggest disadvantage of applying for government grants is that they are not always available or in large amounts. Funding opportunities depend on the needs of local governments and the amount of money available through the various programs.

When filling out an application for any type of grant, it is important to remember the following guidelines: 

A business may also want to consult a lawyer when applying for government grants, especially when it is allocating funds to other local city and state officials. There are certain rules governing this type of funding that the business must abide by if it chooses to submit a grant request. This is especially true when submitting a grant request in conjunction with another entity (such as a municipality).

In order for businesses to deduct qualifying deductible expenses, they must pay their employees at least minimum wage, provide health care benefits and comply with all applicable federal and state labor laws regarding wages and hours worked.

Conclusion

The above information should provide businesses of all types with a basic understanding of the basics of business funding and the funding opportunities available to them. In order to make informed decisions about the best approach to taking their company forward, it is imperative to learn more about various funding avenues, as well as how to take advantage of all of the programs that are available to them through a good business plan.

Not every type of business can qualify for government grants, so a business will have to find other ways to obtain necessary funds. Again, there are many different sources available that can help attract investors and prevent financial difficulties when needed. One effective way for businesses in all industries to secure funds is through their local community bank or credit union.