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However, not all first-time entrepreneurs have the money their business requires. The government has several different financing options available. One of these is called a grant. A grant is a portion of money, usually awarded according to financial need, that does not need to be repaid.
A grant differs from small business loans in that loans must be paid back, typically with interest. Similarly, merchant cash advances, while another viable source of funding, are given in exchange for a set amount of the business’s future sales. The downside to small business loans and merchant cash advances is that the entrepreneur ends up paying more than what they were given. A grant eliminates this factor. If a new small business is struggling financially or if the business operates within a certain field, like agriculture or nonprofit charities, a grant may be the best way to obtain funding. Our small business grant writing guide will certainly help small businesses receive funding!
The first step in applying for a grant is to determine which one is best for a specific business. Differently sized businesses and businesses that cater to certain projects, like medicine or research, will qualify for different grants. In the United States, the new business will need to register with a federal grant program before they can apply for a grant. Make sure that all required information, such as a DUNS number and an employer identification number, is included in the registration. Once the business has been registered, the next step is to write a proposal and fill out the application form.
When writing the proposal, avoid flowery language and slang. Focus on conveying information in a clear, concise way. If the proposal is too confusing or difficult to understand, it may have less of a chance of being accepted. The proposal should first address what impact the business will have on the surrounding community. Identify what the business aims to do, and make an outline of projected goals to accomplish. The proposal should also include a financial plan that details any existing funding and how it will be used.
The importance of editing cannot be understated. A misplaced period or misspelled word can mean the end of a proposal’s consideration. Special attention should be paid when reviewing the content of the proposal. For example, if the proposal focuses more on the existing problems than the solution the business will provide, it may not seem like an effective strategy. A business’s outline needs to be specific and provide information on every step of the plan for growth and development.
Review the proposed budget for the business, and make sure all of the accounting has been presented accurately and in a way that makes logical sense. A common mistake new entrepreneurs make is waiting until the last minute to write and submit the proposal. Aim to finish the first draft three or four days before the deadline. This will allow plenty of time for proofreading. When submitting, make sure the proposal and application adhere to all guidelines set by the grant provider. Grants may be more difficult to get than merchant cash advances or small business loans, but they can quickly put a new business on the road to success. The following is a list of resources to complement our small business grant writing guide: