Small Business Grants

When starting a small business, you may be wondering if there's any way to request small business grants to assist with the creation of the business in question.

In many cases, this is not possible, as the United States Federal Government rarely awards grants such as these to private businesses that are classified as for-profit. There are some exceptions to this rule. Any business that can be classified as a 501C3 non-profit organization for charitable reasons might very well be eligible for federal grants.

Thankfully, other federal resources are available in lieu of not having access to grants. These resources are primarily available from the United States Small Business Administration. This federal agency is designed to assist Americans with the creation and growth of their small businesses. Their services are available to anyone in America, American Samoa, the U.S. Virgin Islands, Guam and Puerto Rico. The resources available with the SBA include loans, venture capital and surety bonds.

While they don't directly provide small businesses with loans, they guarantee loans to small businesses that directly qualify for a loan by a lending institution. This provides small businesses with a better opportunity and increased chance to actually become eligible for a loan. There are several loan programs to choose from for potential small business owners. The first of these is the Basic 7(a) Loan Program. These loans can be utilized for everything from working capital and leasehold improvements to land/building and furniture/fixtures. Loan maturity is typically around ten years for working capital, but 25 years for fixed assets.

The 504 Loan Program is designed to assist with longer term financing. This financing is set to a fixed rate and is used for everything from purchasing real estate and machinery to equipment for expansion. This type of loan is provided by a Certified Development Company. Liens are placed on any collateral and the borrower is typically required to put in a contribution of around 10 percent equity. A Microloan 7(m) Loan Program is made for smaller financing projects or even technical assistance. These loans are generally short-term and provide up to $35,000 in loans. These loans can be used for supplies, furniture, working capital, inventory and more. It's important to note that the SBA doesn't directly guarantee this type of loan. They can only guarantee the loan to an intermediary who then takes care of the rest.

For any of these loan types, there are some notable qualifications that a small business will need to pass before being granted the loan. For one, if the business owner is submitting an application for a loan of $250,000 or smaller, it needs to be properly analyzed and sanctioned by the SBA beforehand. If the SBA allows it, the loan will then be considered.

Aside from loans, there are also Surety Bond Guarantee Programs to take advantage of. In essence, a surety bond is an insurance that will provide protection in the event that a contractor doesn't successfully complete the project at hand. The SBA assists with the approval of these bonds. The bonds are usually required for any construction grants on a federal, state or city level. If a surety bond isn't obtained, the grant money may not be awarded.

The SBA will also assist with the acquiring of venture capital. Venture capital is basically a cash investment of any amount by private investors as a means of gaining a certain amount of ownership in the new business. The SBA has a specific program that helps any small business in lower income areas with the acquiring of this financing. Such funds can be used for hiring employees in these areas. However, there are several qualifications that a small business must pass in order to make use of venture capital.

For one, the small business can't be worth more than $6 million or have a profit of more than $2 million in the previous two years. The county the business is located in must also have a current poverty rate of 20 percent or higher, or have a metro area where more than 50 percent of residents qualify for the Low Income Housing Tax Credit. If the small business is in a rural area, the median household income must be lower than 80 percent of the median household income for the state.

There is an exception allowed by the SBA with federal grants. The small business requesting a grant must have a focus on innovation research or high technology. The Innovation Research Program offers these funds at the standard development stages. The Technology Transfer Program for small businesses provides grants to companies that partner directly with nonprofit technology institutions that specialize in research. In general, all of the grants available to small businesses can be found in more detail at

Featured Articles

3 Ways the 2018 Tax Codes May Increase Costs for Homeowners

In recent weeks, prominent leaders of the Republican party have made boasts regarding their new tax bill. The reform, they claim, will work to provide significant tax relief to both current homeowners and those who w...

Read More

Rural Development Disaster Assistance

Dealing with any type of disaster can be quite frustrating. The good news is that there are several programs that are available to help you. The Rural Development Disaster Assistance can provide you with help if you live in a rural area. ...

Read More

Now is the Time to Head to Carl Jr.'s For Burgers

Burgers have been a staple of American cuisine for many years. Americans love the taste of a juicy burger overflowing with flavor. Over the years, many fast food places have sprung into life serving great burgers to all those ...

Read More

Finish 2017 with Extra Cash in Your Pocket

Get started early on your financial goals for 2018 by earning a few bucks on New Year’s Eve. Whether you’ve got an hour to spare or are eager to work all evening, you have many options. Here are eight of the ways you can earn mon...

Read More