Getting grant funding is a great way to start a business
Starting a business is exciting, especially when you’ve been wanting it for a long time and you finally get to do what you love the most. However, what most expert entrepreneurs will always tell new business owners is that starting a new business is expensive. It becomes particularly challenging when there is insufficient capital to finance the business in the early phase.
This is why new business owners are advised to apply for grants, because grants don’t need to be repaid, unlike business loans. Although grants are competitive and usually come with strict rules and lengthy requirements, it is still possible to get grant funding to start a business. Does this resonate with you? Then, this article is for you! You will find practical steps to find, apply for, and get grant funding to start a business.
Types of Business Grants Opportunities
These business grant opportunities are available for new businesses
While it is true that most government grants are allocated for scientific research and large organizations, there are also grants available for new businesses and startups. Here are some business grant opportunities you should look out for if you’re starting a new business.
1. Government Grants
These business grants can be offered by either the federal, state, or local governments to support different categories of business, including SMEs. In recent times, there have been grant opportunities for startups in Agribusiness, innovative ideas for achieving SDGs, and entrepreneurship. These opportunities can be in the form of mentorships, grant competitions, microgrants, and operational support.
2. Corporate Grants
Large organizations and brands sometimes run business contests and competitions, such as pitch deck competitions that award cash prizes to the lucky winners. Their target businesses are mostly startup businesses whose interest aligns with theirs. Some banks like Wema Bank and Access Bank have been running incubator programmes for small businesses. You can check their website for more information. Note, this is not a bank loan scheme for micro businesses.
3. Foundation and Philanthropic Grants
This is the most common type of business grant, which is why it is the most competitive, and the application process can be stressful. The Tony Elumelu Foundation (TEF), FATE Foundation, Commonwealth Foundation, Gates Foundation, and Ford Foundation, among others, provide grants to new businesses and startups with innovative ideas. However, some of these Foundations give grants that only support underserved community outreaches and projects, and also align with their mission. You can check Applai or keep tabs on these Foundations’ websites to know when these grants are available.
4. Niche or Demographic Grants
Niche grants are tailored for specific sectors, such as agriculture or any of the SDGs, including Climate Action or Good Health. Demographic grants, on the other hand, are for a certain demographic, based on factors like gender or location. There are grants for only women entrepreneurs, and also those for people living in a specific country. These grants are available online, and you can visit Applai to check those that are for your demography or niche.
5. Microgrants and Local Accelerator Prizes
There are growing numbers of economic development organizations and business empowerment schemes that often offer small amounts to new businesses and startups that have brilliant ideas. These grants usually do not require much information for the application process. The most important thing here is being able to persuasively sell your business plans or ideas to the funders.
Step-by-Step Plan to Get Grant Funding
This step-by-step plan is your guide to getting grant funding to start a business
No one wake up to grant funds sitting in their bank accounts to support their business; a lot of planning and preparation are involved. We will share easy, simple steps that you can follow to secure grants for your bussiness
1. Define your business and funding needs
Define exactly what you need for your business growth and expansion in terms of product and budget. Write a list of the products you need for your business and prepare a suitable budget. You don’t have to sweat about this process; there are available startup business templates and AI tools to help you with this.
2. Identify the right grants
Whenever you see any grant application, the first thing is to check its requirements and compare them with your business. If a funder is looking for businesses that have existed for 5 or more years, and yours is just in the ideation phase. There is no reason to try your luck by applying. Rather, apply for grants that are targeted at new businesses and startups, and carefully review their instructions and requirements.
3. Prioritize realistic grants
Your priority when targeting funders should be those whose interest matches your business objectives. Most funders would rather fund businesses in line with what they currently do instead of those that don’t. For instance, you cannot apply for agribusiness grants if your interest lies in public health. Also, spend time researching your funders, know how they can support your business, and research their previously funded projects in your country.
4. Prepare core application documents
Some documents apply to all types of grants and it is best to put all these documents together in advance. Such as your executive summary, business proposal, detailed budget, evaluation plan, testimonials or letter of support. The importance of these documents is to ascertain the credibility of your business and the feasibility of what you intend to do (for those starting a business).
5. Write a focused application
Funders want to see that you deserve the grants, and writing a focused application helps you to stand out from others. These funders do not have the time to call over a thousand applicants on the phone, which leaves your application as the only means through which they get to know what you do. Therefore, answer each application question clearly and provide examples, figures, and statistics where necessary. As much as possible, avoid jargon and unnecessary information.
While writing, follow all the instructions as listed on the application form or website. Comply with the word count, submit the document format, and use a spreadsheet for your budget. Finally, cross-check every requirement before submitting your application, and submit before the deadline.
What If You don’t Get a Grant Funding
After submitting grant applications, we always advise grant applicants to track the progress of their application. If it turns out that you didn’t get the grants you applied for, don’t stop applying. You can also explore other early funding paths for new businesses.
If you have the capacity, you can apply for a microloan from banks or cooperative banks that support small businesses and have small interest rates. Aside from loans, you can apply for startup competitions or accelerators to get exposure, mentorship, and financial support. Another option you can explore is crowdfunding; design a flier that displays your business objectives and bank account details for those who might be willing to support you.
Grant Funding for Business
Securing grant funding to start a business is a great way to launch your business without getting into debt. However, this involves so much planning, preparation, and research on the funder’s mission. Although this process is time-consuming and taxing, you don’t have to go through it all by yourself.
There is a platform specially designed for grant applicants that maximizes AI tools to get the right grants for startups, prepare focused applications, and monitor the progress on your grant application. With Applai, you can be sure that you will secure the grant funding to start a business even without microloans.
