All About SBA Small Business Grants
As an entrepreneur or small business owner, there comes a time when you may want capital to finance your business. Whether you need funds to take your small business to the next level or overcome hurdles that come your way, there are numerous funding opportunities that you can select. SBA grants are one of the popular financing options for small businesses in the United States.
This article is for those interested in applying for an SBA grant. We will cover everything you need to know about SBA small business grants and how to identify them. We will also discuss how to qualify for an SBA grant, among other things you should know.
All About SBA Small Business Grants
The US Small Business Administration, otherwise known as SBA, works hard to provide support and resources to small businesses. This independent agency assists small businesses through four programs counseling and training, federal contracting, and the provision of SBA loans and grants.
SBA provides grants to small businesses, local states, and community organizations that support entrepreneurship. The SBA grants are available through several programs, some targeting small businesses and grants for nonprofit startups, others targeting states and community organizations.
Let’s explore the list of SBA grant programs available. It’s worth mentioning that some of these programs are ongoing, while some, like the COVID-19 relief programs, closed in 2021.
1. COVID-19 Relief Programs
The coronavirus pandemic negatively affected a lot of small businesses. To alleviate the impact, SBA introduced the COVID-19 relief programs to provide financial assistance to small businesses affected by the pandemic.
The COVID-19 relief programs offered by SBA include:
- Economic Injury Disaster Loan (EIDL)
The EIDL program is, in a real sense, a loan for small businesses affected by the pandemic. Although, you can get a grant through the targeted EIDL grant of $10,000.
- Paycheck Protection Program (PPP)
The PPP program is also a loan for small businesses affected by COVID-19. But this loan is forgivable for those eligible for loan forgiveness.
- Shuttered Venues Operator Grant (SVOG)
This program is for venue operators affected by the pandemic. Businesses eligible for this grant include:
- Live venue promoters and operators
- Museum, aquarium, and zoo operators
- Motion picture theatre owners and operators
- Talent representatives
- Restaurant Revitalization Fund (RRF)
The RRF program assists bars, restaurants, wineries, distilleries, and catering businesses impacted by the pandemic.
- SBA Debt Relief
The SBA Debt Relief program is for businesses with an existing SBA loan affected by the pandemic.
Most COVID-19 relief programs ended in mid-2021. SBA, however, said it might reopen the Shuttered Venue Operator Grant (SVOG). The idea is to give 50% of the original SVOG amount. You can contact an SBA resource partner to check if there are any COVID-19 relief programs still available.
SBA grants that are ongoing include:
2. State Trade Expansion Program (STEP)
The STEP program offers assistance and guidance to small businesses looking to export their products and services. This program is available to small businesses through the territory and state government in their region.
It began in 2010. It has been in operation for eleven years now. To be eligible, you should be new to exporting. The STEP program assists small businesses in the following ways:
- Guidance on how to export
- Participating in an export workshop and foreign trade missions
- Designing international marketing campaigns and other materials
- Website translation services
- Payment for subscription services offered by the U.S. Department of Commerce, among other agencies
3. Small Business Innovation Research Program (SBIR)
THE SBIR program is a funding program coordinated by SBA to provide financial assistance to startups and small businesses involved in research and development. For a small business to be eligible, they need to have a technological component or be conducting research work that meets the needs and requirements of the federal government.
Other eligibility requirements include:
- The business should be US-owned.
- The business should have less than 500 employees – most successful applicants usually have ten employees or fewer.
Although very competitive, businesses that apply for the STEP program can get a significant amount of funding. Applicants can win $100,000 to $200,000 on Phase 1 funding and up to $1 million on phase 2. To qualify for phase two, you should have successfully passed phase 1.
4. Small Business Technology Transfer Program (STTR)
The STTR program is similar to the SBIR. This program also funds small businesses and startups conducting research and development. The only difference is that STTR targets small businesses that are in a partnership contract with a research institution.
The STTR and SBIR programs are available through several federal agencies such as the USDA (the U.S. Department of Agriculture) and NASA (National Aeronautics and Space Administration). When applying for these programs, you need to go for the agency interested in your field and technology.
How to Qualify for an SBA Grant
Before applying for an SBA grant, it’s vital that you first determine if you are eligible. You wouldn’t want to waste your time applying for a grant that you cannot receive.
Each SBA grant has specific eligibility requirements that you need to meet. Some may require you to engage in certain activities, for example, getting into export or research and development. Others might require you to be making a certain amount of revenue or have been in business for some time.
There may also be a limit on how you spend the SBA grant. For example, SBA denotes that the grants are not for starting or expanding a business.
To qualify for an SBA grant, you need to pass the SBA’s definition of a small business. SBA defines small businesses in terms of:
- The maximum number of employees – depends on the industry. For example, in wholesale trade, the business should have 100 to 250 employees. In mining, the maximum number is 250 to 1,500 employees.
- Standard size in dollars – also depends on the industry. In real estate, the maximum is $7.5 million. While in construction, the maximum is $36.5 million.
SBA provides a comprehensive table summary guideline of employees and standard size in each industry. The small business should also be:
- Operating for profit
- Operating in the United States or contributing to the growth of the U.S. economy
How to Apply for an SBA Grant
The application process may vary depending on the grant and the state or agency behind the funding opportunity. You may, however, follow this general process:
1. Make Sure You Are Eligible
As highlighted above, ensure you are eligible for the SBA grant before applying. You need to meet the definition of a small business, among other qualification requirements.
2. Search for the SBA Program That Best Fits Your Small Business
Chances are, you may not be eligible for all SBA grants. Search for the ones that apply to your business or industry.
3. Register for the Grant
Sign up on the website or agency that offers the SBA grant that you want to get. In the case of SBIR and STTR, you will register through SBIR.gov. For STEP programs, you will register through the local state in your area. You can also register and manage all your federal grants through grants.gov.
When applying for federal grants through grants.gov, the registration process for individuals is different from that of an organization. Grants.gov defines an organization as an entity consisting of people such as a non-profit organization, state government, or private business.
Before registering on grants.gov, your organization should first obtain a DUNS (Data Universal Numbering System) number. You should also create an account with SAM.gov. The DUNS number is unique to all organizations, and it contains nine characters used to identify your entity.
Some details that you may need to give out on your SBA grant application include:
- Number of months or years in business
- Number of employees
- Revenue details
- Financial projections or budget
- Your organization’s Employer Identification Number (EIN)
- Business plan or pitch deck
- Social media handles (Facebook, Twitter, and Instagram)
- Your plan for using the funds
Here are a few tips to help improve your chances of getting the grant:
Most states and agencies will want to learn about you and your business before giving you the grant. Prepare a detailed business plan before you apply. A business plan is especially vital if you haven’t started the business or conceptualized the idea yet.
- Know your financial information
Some SBA small business grants will require you to provide your revenue and expenses information. Know your numbers. Strive to keep your bookkeeping records up to date.
- Read the grant instructions
Always read the instructions before applying for an SBA grant. There might be information or documents that you need to present to win the grant. Follow the guidelines and provide all the required information.
- Get advice
When you find an SBA grant that’s a good fit for your business, reach out to the agency representatives or SBA resource partner in your area. They may advise on what to focus on and what you need to provide to get the grant. You can always benefit from talking to an expert who’s done it before or does it daily. You can also hire a grant writer to help you through the application process.
- Research the grant and the agency
Research on the SBA grant that you want. Try and understand the motive behind the federal government offering this particular grant. While at it, do your homework on the agency or state. Each agency has its requirements and guidelines.
What to Know About SBA Small Business Grants
Here are a few things to keep in mind regarding SBA grants as well as maximizing your chances of approval:
SBA Grants Don’t Necessarily Have to be Cash
SBA grants can come in the form of training, an invitation to workshops and events, and services from federal agencies. They don’t always come in the form of money.
No Repayment Clause
Unlike loans that you need to repay, grants are basically free money. They come with no repayment clause attached to them.
Grants are Competitive
Since SBA small business grants are free, many small businesses compete for them. You need to do your homework on the requirements and agency behind the grant to increase your chances of success.
Be Cautious of Scammers
When applying for an SBA grant, beware of scammers. Whenever you suspect anything, reach out to an SBA advisor or resource partner. You can also report fraud through sba.gov.
If anyone from SBA emails or contacts you, check the email address to see if it ends with @sba.gov. Be cautious of anyone who contacts you from SBA without an official SBA email address.
These small business grants are offered to small businesses, non-profits, and community organizations that support entrepreneurship by the federal government through The Small Business Association.
The two ongoing grants that you can apply for include the SBIR and STTR programs. For COVID-19 relief programs, it’s best to consult an SBA resource partner in your area to see the ones still available.
Before applying for an SBA grant, ensure you are eligible. Make sure your small business meets the definition of an SBA small business. Don’t be afraid to consult a resource partner or agency representative to advise you on how to apply.
Below you’ll find some resources to help you with SBA grants. Feel free to bookmark this page so you can use the resources any time you need them.
How to Identify SBA Grants
The easiest way to identify SBA grants is by heading to SBA.gov. Check out the grants available, qualification requirements, among other things.
You can also use these valuable resources:
Grants.gov highlights all the grants offered by the federal government. You can use this site to search for SBA grants and other grants from other agencies and institutions like local governments and non-profit organizations.
GrantWatch also contains a comprehensive list of all grants from the federal government, non-profits, community organizations, and education institutions. You will, however, need to pay a subscription fee. This website gets updated constantly, so most of the grants you will find are new and ongoing.
SCORE is a free resource partner of SBA. This non-profit organization can connect you to business experts and mentors that will guide you through searching or applying for grants.
Small Business Development Centers (SBDC)
You can find SBDCs in all states and territories in the United States. These centers are also resource partners for SBA. Their goal or purpose is to help small businesses with counseling and guidance. SBDC advisors can provide counseling on marketing, taxation, grant application, and financing, among other resources you may need for your business.
Books are a great way to expand your knowledge about SBA small business grants.
You can work at your own pace and when you want. Many books are well organized and split up into subtopics. So you can digest the information in an organized manner.
I’m not much of a reader, but I enjoy listening to audiobooks, especially if I’m driving or doing something mundane that doesn’t require thinking. Instead, I can focus on the audio message.
Another method for information about SBA small business grants is to follow the news. Even if your subject isn’t on the nightly news. You may discover recent items by using Google News, which shows the most recent results and the archives.
I enjoy watching videos more than reading because watching a video takes away a lot of work from focusing and concentrating on reading material.
Another advantage to using YouTube is a lot of the videos are only a few minutes, so in a half-hour, I can go through five or ten videos and gain a broad overview of almost any topic.