The possibility of federal grants is appealing to many business owners for a multitude of reasons, but the reality is that federal grants and grants of any kind can be difficult to apply for and qualify for. The following article will help to answer basic questions about what government grants, federal grants, free grants, and federal domestic assistance programs may be available to you.
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According to Mercatus Center, George Mason University, the U.S. spends over $515 billion a year on grants-in-aid to state and local governments. In fact, after social security and national defense, grants are the next largest budget item for U.S. expenditures.
What is a grant? (According to the U.S. grants.gov website)
A grant is a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Catalog of Federal Domestic Assistance (CFDA).
A grant is one of many different forms of federal financial assistance. Federal financial assistance is a broad term to refer to the various ways the U.S. government redistributes resources to eligible recipients. On Grants.gov you will find grant and cooperative agreement opportunities from federal agencies that award grants.
The Grant Lifecycle
The grant process follows a linear lifecycle that includes creating the funding opportunity, applying, making award decisions, and successfully implementing the award.
The specific actions along the lifecycle are grouped into three main phases. Each of the three phases has its own page that provides a more detailed look at the process:
- Pre-Award Phase – Funding Opportunities and Application Review
- Award Phase – Award Decisions and Notifications
- Post Award – Implementation, Reporting, and Closeout
Why look at federal grants?
Many people or entities are looking for private loans, federal loans, or debt financing in order to explore the best way to create growth or capital supply for their needs. It’s common to look at a loan, or at the rules for paying development and management costs through these types of funding. But grants—money that usually does not require being paid back—can be a highly desirable option.
When considering a federal grant or federal money, the application process and grant education should be considered. More will be shared about the application process in this article, but do your research about federal government grant programs to ensure you access the correct database, communities, and official government small business development centers.
There are several types of organizations that typically apply for grants and grant funding opportunities. Thee include:
- Nonprofits that do not have a 501(c)(3) status with the U.S. Internal Revenue Service (IRS), other than institutions of higher education
- Nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education
- City or township governments
- State governments
- County governments
- Special district governments
- Native American tribal governments (federally recognized)
- Native American tribal governments (other than Federally recognized)
- Independent school districts
- Public and state-controlled institutions of higher education
- Private institutions of higher education
- Organizations other than small businesses
Public Housing Organizations
- Public housing authorities
- Indian housing authorities
Individuals may submit applications for a funding opportunity on their own behalf. If you are registered with only an individual applicant profile, you are only allowed to apply to funding opportunities that are open to individuals.
Small business grants may be awarded to companies meeting the size standards established by the U.S. Small Business Administration (SBA) for most industries in the economy.
Examples of grants by type
- Community Development Block Grants
- Alcohol, Drug Abuse, and Mental Health Services Block Grants
- Local Law Enforcement Block Grants
- National Institutes of Health for bioscience research
- National Science Foundation for physical science research
- Gov formula grants for human services from the federal trade commission
- Universities and college grants
- Agency or business grants for students
Free grant eligibility is best obtained by applying to your most eligible grants at grants.gov. If you qualify for aid or assistance from agencies, you can get pay
In Canada grants, loans, and grant programs from the government are widely available. The CRA website lists the following:
- Canada Recovery Caregiver Benefit: Income support to care for dependent family members
- Business Assistance — Immigrant Investor Program: Grants for growth and innovation in Quebec
- CanExport SMEs: Funding to develop export markets
- Canada Emergency Rent Subsidy (CERS): Direct support for commercial tenants
- Regional development agencies—COVID-19 support: Support for SMEs and tourism operators
- Impact Canada Challenge Hub: Financing to solve economic, environmental, and social problems
- CED Tourism Relief Fund: Funding for tourism businesses in Quebec
- Support for innovation projects: Funding for product and process innovations in Quebec
- Innovative Solutions Canada Program: Funding for innovations the government needs
- PME MTL — Funds for Retail businesses: Financing for Montreal-based retail startups
- Proof-of-Concept Program: Financing for natural product innovations
- Agrifood Innov’Action — Technology Adaptation: Financing for technology transfer projects in Quebec
- Mitacs — Elevate: Funding to work with top-ranked expert researchers
- Compensation for Employers of Reservists Program: Grants for businesses that employ reservists
- Efficient Solutions Program: Funding to implement energy efficiency measures in Quebec
- Workforce training measure: Funding for workforce training in Quebec
- Human resources management support: Human resource management assistance for Quebec companies
- Metropolitan Initiative and Outreach Fund – Stream 1: Support for major projects and events in the metropolitan area
- CED Jobs and Growth Fund — For-profit: Money to future-proof your for-profit business in Quebec
- Agricultural Clean Technology Program — Adoption: Money for agricultural producers to buy clean technology
- Official Languages Economic Development Initiative in Quebec — For-profit: Funding for Quebec SMEs promoting official languages
Do I need a business plan?
Yes, you most likely do need a business plan to qualify for federal grants or other kinds of government grants. Eligibility and grant program awards are given based on the success potential of your business. A basic business plan is a foundation needed to showcase that potential. Even if your business has already been creating revenue for a few years, a plan is most likely still needed. But you do not have to stress too much about making it a comprehensive plan.
Your plan should include an executive summary, target market, business goals, strategies, tactics, associated costs, and basic financial items like income statements and business projections. For more information, visit this QuickBooks site: https://quickbooks.intuit.com/r/starting-a-business/business-plan-template/
Good luck, you can do it!
If you are interested in private grants or government grants that could be awarded to your department or organization, follow the instructions and resources provided in this article. And don’t forget, Gov program aid for students or college loans can also aid or answer questions about business grants because they often are linked together. But official agency grants or federal government grants are more expensive to apply for and qualify for.