Small Business Grants for Women, Minorities & More
Small business grants are kind of like grants for college. They’re out there if you can find them, offered by a variety of government and private sources, and they can be crucial to the affordability of development of growing companies. But they’re also very difficult to qualify for, with the bulk of the available funds going to the top few percent of people with particular, in-demand skill sets.
For example, the federal government’s primary small business grant programs only approved about 17% of grant applicants in 2012. And, dating back to 1983, only an average of 4,709 small business grants have been disbursed each year.
That is not meant to dissuade you from your pursuit of a grant, but rather to illustrate why you shouldn’t count on getting funding in this manner. With that being said, we’ll help you maximize your chances of grant approval by giving you a complete overview of the major grants programs in existence as well as the scope of the market and also providing helpful application tips.
While many business grants are earmarked for certain industries, uses and types of entrepreneurs, a number of different public and private programs cater to the small business community in general. You can find major examples of these programs below. For a full list of all public grants, visit the federal government’s grants database.
- Community Development Financial Institutions Fund: Provides awards of up to $2 million which can be used by small business recipients for financing capital, reserves or operations. This assistance is provided in the form of equity investment, loans and grants.
- Mission Main Street Grants: This program run by JPMorgan Chase enables readers to vote among nominated small businesses to determine which should considered by the site’s panel of judges for grants up to $100,000. Forty-four businesses received grants through this program from 2012 through 2014.
- National Association for the Self-Employed (NASE): A non-profit group devoted to helping entrepreneurs through funding programs and legislative lobbying, NASE offers both small business development grants and small business growth grants. It disburses roughly $180,000 in these categories each year, according to the group’s website.
- Love a Local Business: Small business owners can submit “wishes” – descriptions of how they would use grant money – to this organization’s website, which enables users to vote on which companies should get $5,000 awards.
- The Leadership Grants Organization: This is an international small business funding organization that provides small grants to people looking to start or grow a business.
- Georgia-Pacific Foundation: The maker of Brawny paper towels and Dixie cups operates a program that supports education, the environment and entrepreneurship in the areas in which its employees live.
R&D / High-Tech
Perhaps the biggest purpose of small business grants is to promote innovation in high-demand areas, particularly those that are technological or militaristic in nature. Explore the various grant options listed below to learn more about whether your company qualifies for this type of funding.
- Federal And State Technology Partnership (FAST): This cooperative program distributes roughly $2 million per year (usually up to $100,000 per applicant) to companies engaged in science or technology-based business.
- Small Business Innovation Research: Called “America’s Seed Fund,” along with the Small Business Technology Transfer program, this Small Business Administration (SBA)-run initiative provided 95,889 small business grants from 2000 through 2014, according to published data. Grants are distributed by a variety of government departments and agencies – the Department of Defense, Department of Energy and NASA, for example – to companies engaged in innovative research and product development. Roughly 16% of applicants were approved in 2012, with the average award being roughly $151,000.
- Small Business Technology Transfer: SIBR’s cousin, this program provides grants to and promotes partnership among small businesses and non-profit organizations conducting technological research. It has disbursed 89% fewer grants than SIBR since 2000, according to WalletHub data analysis, though STTR boasts a higher acceptance rate (21%) and a higher average payout ($161,000).
- Biomass Research and Development Initiative Competitive Grants: Provides financial assistance to companies focused on biofuels and feedstock development.
- Clusters Initiative: A public-private partnership designed to promote innovation and job creation in promising economic centers across the country.
Farming & Rural
The American economy has gradually deemphasized farming over the years, but with more and more companies going the “natural and organic” route and global food scarcity causing major problems, a number of programs have been developed to promote the farming profession as well as rural development in general, given the often high unemployment rates in these areas.
- Rural Business Development Grants: Available to towns, non-profit corporations, higher-education institutions and a few other groups, these grants are designed for the expansion or development of private businesses in rural areas. To qualify, businesses have fewer than 50 employed individuals and less than $1 million in annual revenue.
- Rural Cooperative Development Grant Program: Offers grants of up to $200,000 to individuals and businesses for the expansion of economic activity in rural areas.
- Value-Added Producer Grants: Helps agricultural producers enter new markets by providing up to $70,000 in planning grants and as much as $250,000 in working capital grants. A total of $30 million is available through this program each year.
- Rural Business Enterprise Grants: Awards from $10,000 to $100,000 are available to non-profit groups operating or planning entry into rural markets.
Given the traditional disparity between male and female business owners, certain programs exist to provide financial assistance to female entrepreneurs. Exploring these options, in addition to the other grant categories your company may qualify for, will improve your odds of finding the right offer and getting approved.
- Office of Women’s Business Ownership: The SBA’s department dedicated to female entrepreneurs, the OWBO touts a number of statistics about the share of SBA loans going to woman-owned businesses. However, it doesn’t appear that the office administers loans or grants itself. Furthermore, it’s unclear whether any particular funding amount is earmarked for female entrepreneurs each year.
- Eileen Fisher: The women’s apparel company provides $100,000 in awards each year to 10 woman-run small businesses that are “beyond the start-up phase and ready to expand their business and their potential for positive social and environmental impact,” according to the group’s website.
- Amber Grants: Named after a young woman who died before her entrepenural dreams could come true, this non-profit organization gives out a $500 grant to a female small business owner each month. These 12 monthly winners are then eligible for an additional $2,000 prize.
- Count Me In: Its full name is Count Me In For Women’s Economic Independence, and this non-profit attempts to live up to this billing by sponsoring a few different programs aimed at aiding the woman-run small business community. These include a “year-long growth marathon” and a coalition of 100 female small business owners from a handful of metro areas around the country.
- Women’s Funding Network: This group doesn’t directly provide financial assistance, but it does connect female entrepreneurs with donors and lenders, so it could nevertheless prove to be a good source of leads.
- Women’s Financial Fund: A private non-profit organization providing grants of $100 to $5,000 to women who want to start or grow businesses.
- Training and Services to End Violence Against Women with Disabilities Grant Program: Run by the Office on Violence Against Women, a division of the Justice Department, this program provides grants to services and organizations that work with victims of violence.
Like women, minority entrepreneurs have long been little represented in the small business community, despite comprising about 38% of the U.S. population. A couple of programs exist to help alter that dynamic, especially when it comes to black business owners and Native Americans.
- Small and Disadvantaged Business Utilization: The Department of Justice’s Small and Disadvantaged Business Utilization program promotes the awarding of department contracts to small businesses. According to the DOJ website, the department spent $6.5 billion with private entities in 2013, and $1.7 billion went to small businesses.
- State Agencies: Like the federal government, each state sponsors its own minority business assistance programs. Supplementing your federal and private grant applications with these localized offers will help you maximize your award potential.
- Energy and Mineral Development Program: This federal program provides assistance to Native American tribe members so they can assess the natural and renewable resources available on tribal land.
- Native American Business Enterprise Centers: This program provides assistance to businesses owned not only by Native Americans, but also by African Americans, Hispanic Americans, Asian and Pacific Islander Americans. It targets companies with at least $500,000 in annual revenue who are deemed to have high-growth potential.
With the nature of war changing, and more injured veterans returning from our recent Middle Eastern conflicts compared to past wars, a wide-range of programs have been developed to help service members reacclimatize to civilian life. Many of these programs are aimed at promoting entrepreneurship among veterans, with the aim of benefiting both the individual recipients and the country’s recovering economy.
- Veteran Affairs Homeless Providers Grant and Per Diem Program: A program funded by the Department of Veterans Affairs that provides financial assistance to organizations that work with homeless veterans.
- Self-Employment Grants for Service-Disabled Veterans: This program provides funding to injured veterans who provide complete, viable business plans.
Other groups – like Hivers and Strivers, an angel investment firm focused on companies founded by graduates of American military academies – don’t provide grants but instead offer equity-based funding.
Small Business Grant Statistics
Examining statistics related to the small business grant market provides helpful perspective with which to evaluate the scope of grant-based funding, the types of companies that get the majority of the money and, ultimately, your own likelihood of approval.
Number of Grants By Year
- The average initial payout through the Small Business Innovation Research (SIBR) program was $151,420.35 in 2012 – the most recent year for which complete data is available. The average Small Business Technology Transfer (STTR) payout was $160,778.46.
- Of the $79.1 million dispersed through the STTR program in 2012, 50% was classified as being small business awards, while 52% was labeled university awards and 38% went to research institutions (these figures obviously indicate that some recipients fit into multiple categories).
- The largest year-over-year increases in grant dispersal from 2013 to 2014 came primarily from defense-focused agencies and departments: Defense Health Program (370%), United States Special Operations Command (317%), Air Force (276%), Customs and Border Patrol (183%), Navy (155%), and Office of the Secretary of Defense (135%).
- The largest increases in grant dispersal since the beginning of the decade have come from the Defense Heath Program, National Oceanic and Atmospheric Administration, Advanced Research Projects Agency-Energy, Department of Transportation.
- The Department of Defense and Department of Homeland Security offer the highest acceptance rates for FBIR grants, followed by the Department of Health and Human Services. HHS provides the most money per application submitted and application approved.
Number of Grants By Year
- The number of grants awarded to women and minority business owners has skyrocketed since 2009. What’s the cause? We suspect a record-keeping issue, and we’re looking into the matter.
- The Department of Transportation has by far the highest minority grant acceptance rate, followed by the Department of Homeland Security.
Percentages Of All Grants Going To Women & Minorities
Tips For Maximizing Your Chances Of Getting A Grant
When it comes to applying for a grant, similarities to the college application process – and even job hunting – begin to emerge. You’ll obviously need to put your best foot forward and meet the requirements enumerated on the application forms. Distinguishing yourself from the rest of the application pool and viewing your candidacy through the eyes of the review committee are essential as well.
More details about the various measures you can take to improve your odds of success Include:
- Be Realistic About Your Qualifications: In light of the already long odds that you’re facing, it’s important that you be extremely judicious in terms of which grants you apply for. You don’t want to waste your time and effort applying for a grant you may be automatically disqualified for.
- Determine Necessary Documents & Submission Dates: Organization is essential to most application processes, so one of your first steps should be to make a list of every single piece of supporting documentation you’ll need and any applicable due dates. This will not only ensure that you avoid missing important deadlines, but it will also help you determine what information you may need to acquire while you still have the time.
- Distinguish Yourself From The Pack: Numerous other companies just like yours will be applying for the same funding, so think through why your should business get the money over other applicants. Providing a compelling answer to this question is perhaps your biggest objective in the business grant application process.
- Be Thorough & Self-Critical: Once you think your application is done, review it and then review it again. You may be surprised at how many typos, factual mistakes and areas for improvement you’ll find each time around.In doing so, it’s crucial that you attempt to remove personal bias from the process and view your application from a third-party point of view. Being critical on yourself and making adjustments in advance of submission is far better than being lenient and getting turned down, after all. Asking a friend or relative to review your application after you think it’s in perfect shape will be helpful.
- Get Letters Of Support: Political figures and other notable community members can essentially vouch for your company in a formal letter sent to the particular organization you’re seeking a grant from. For example, many Congress members even have a form you can fill out specifically for this purpose.Such a letter obviously won’t itself secure you a loan, but it could help put a borderline application over the top, so why not pull out all of the stops?
- Order A Grant Guide: Public agencies often have explanatory information for financial assistance applicants, sometimes in the form of a specific guide. It can’t hurt to ask what’s available from the organization with which you’re applying.
- Don’t Count On Getting It: This point is worth repeating: You should view a grant not as an necessary element of business success, but rather as an unexpected benefit that could help shore up your balance sheet and fuel growth. This is so important because your perspective on the role of a grant influences your actions and decision-making regarding other company funding sources and the direction of company operations.
Know of a small business grant not listed in this guide? Make sure to tell us and help fellow entrepreneurs build their businesses!
Ask The Experts: What’s The Deal With Business Grants?
For more insights into the murky dynamics of the small business grant landscape and predictions about the future availability of grants, we posed the following questions to a panel of leading small business funding experts. You can check out their bios and responses below.
- How has the amount of small business grants dispersed changed throughout the years?
- What tips do you have for small business owners looking to get approved for a small business grant?
- What changes would you make to federal small business grant programs in order to improve outcomes?
Image: arka38 / Shutterstock
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