Grants

Yes, there is such a thing as free money! Well, sort of. Grants are increasingly available to for-profit companies, not just nonprofits. But they often come with strings attached.  There are two main sources of these money pools: foundations and the government.

Foundations typically offer grants to eligible 501(c)(3) non-profits, but more are awarding grants to for-profits as well, especially those with a social mission. Organizations such as the Kauffman Foundation, Ashoka and Knight Foundation, among others, make grants aligned with their mission.

In addition, many federal, state and local government agencies charged with economic development also provide grants. They are typically awarded for specific purposes that further national or local goals.

Unlike loans, grants do not have to be paid back. But they usually come with strict requirements, accountability measures and reporting. And in some cases, the business must make a matching investment to be eligible.

Tip: The application process for grants can be lengthy, so make sure you are a good candidate before applying. And it can be worth it to hire a grant writer or specialist.

Pros:

  • Money doesn’t have to be paid back
  • Granting organizations may be valuable partners and mentors

Cons:

  • Grant awards are typically low
  • Applications can be time-consuming to fill out
  • May come with time-consuming reporting requirements

Resources:

Grants.gov

www.foundationcenter.org

BusinessUSA’s wizard helps you search for suitable government grants.

For a state-by-state list of economic development grants, see: http://rflavin.com/blog/state-state-guide-business-grants-2015/