What Are Business Grants and How To Apply

Grants are a powerful and often overlooked source of business funding. Unlike loans and lines of credit, grants don’t need to be repaid, making them a low-cost way to grow and expand your business.

Read more for an introduction on business grants, what you can expect to gain, and how to prepare your application. 

What are small business grants?

A business grant is a financial award given to carefully selected businesses. In other words, it’s essentially free money for businesses that meet a criteria. The qualifications could be based on your location, gender identity, minority group status, income level, length of time in business, and a number of other factors. Emergency recovery grants are also available to provide relief to business owners suffering property damage or loss of income after a disaster. 

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Grants can come from a nonprofit organization, a private company (like Square), or a local, state, or federal agency. These organizations have an interest in giving back to the community, boosting the local economy, and helping under-represented groups contribute through their businesses. 

While business loans need to be repaid and may incur additional fees or interest charges, grants typically do not have to be paid back. Because of this, grants tend to be highly desirable, and the application process can be competitive. Depending on the grant and the provider, there may be certain requirements and limitations on how you can spend the funds. These limitations depend on the grant and the agency providing it. Even then, the award can still be used to cover the majority of expenses, allowing you to invest more in your business.

What do you get if you receive a grant?

Grants can help you grow your business by providing you with funds to spend where you need them the most. This could enable you to hire more employees, pay for additional inventory, cover start-up costs, open a new location, undertake more training, or pay for team training and up-skilling. Grant money can also help with other business costs, such as covering your rent, paying for renovation, or even getting your business back up and running if it’s impacted by an emergency. 

An additional benefit of receiving a grant may also be new marketing opportunities. Grant providers often promote the grant winners on their website or social media. Sometimes top applicants who did not win grants will also be featured in an honorable mention section. Being included in promotional efforts from a big brand or government agency can build brand awareness for your business. You can also use the announcement in your own marketing efforts, listing it on your social media accounts and website, and writing a press release to send to local media. 

How do you find a grant?

Luckily, there is no shortage of business grants available for businesses like yours. A great place to start is checking the local business sections of your local and state government websites. Another search resource is your local chamber of commerce, which may have a list of available grants in the area. 

Narrow down your search by only looking at grants that your business will be eligible for. Many grants have very specific requirements, and they will not consider qualified applicants, so save yourself time and look carefully before you apply. Some of these recipient requirements may include businesses that have a certain number of employees, are located in a specific location, belong to a specific identity group, or have a certain revenue bracket. 

How do you apply for a business grant?

Once you’ve identified a grant that you qualify for, you will need to go through the application process. Applications can vary in length and effort, with some that will require a significant amount of preparation and completing a longer list of requirements.

Be prepared to share information about yourself and your business. Most grants will ask for basic business information, copies of core documents, background about you, a story of why you deserve the grant, and an explanation of how you would spend the money if awarded. 

Here are some tips to help prepare your grant application:

1. Know your timeline

Start the process by finding the deadline to submit your application. Typically, applications are only open once or twice a year, though some accept candidates year-round. It’s a good idea to conduct your research in advance, as you may need some time to track down paperwork and write your application. 

Even if the deadline has passed, it still may be worth it to look into the application process and prepare for the following application period. By starting in the off-cycle, you’ll have plenty of time to fill out forms and be ready to submit when it opens again. 

2. Understand the details

Before you start applying, make sure you do your research and learn what the expectations are, both for the application and for the grant itself. Start by compiling a list of important questions for you to fully understand what you’re applying for.  

Some questions to consider may include:

• Costs:
  • Is there an application fee? 
  • Is a paid membership required to join the organization and apply for the grant?
    • If so, how much will that membership cost every year? What is the benefit of the membership? For how long would you have to be a member?
  • Will you be required to match the grant funding by contributing a certain portion of the award amount?
• Privacy:
  • Is the source of the funding a local government organization, a nonprofit charitable organization, or a large corporation?
  • Will the grant provider publicly include information about recipients on their website?
  • Will your name, image, and business brand be used if awarded? How, where, and for how long?
• Application:
  • What documents and information will you have to provide?
  • Will there be an interview process?
  • When will the decision be made and the grant awarded?
• Endowment:
  • Are the limitations of how you can spend the money?
  • How much time will you have to use the grant money?

Explore the grant website and application to find the answers to your questions. If there’s any information you can’t find on your own, reach out to the grant provider support center to find out more. Don’t forget to read the fine print, including the terms and conditions on the grant application site. 

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3. Prepare your paperwork

Review the application and submission guidelines thoroughly to see what documents you are required to provide. Most grant applications list what is required before you start your application, so you can have everything in order when you are ready. Some grants are simpler, while others require submitting supporting paperwork or evidence to prove you are eligible to receive the grant. 

Commonly requested paperwork includes your business plan, operating permits or licences, incorporation or registration documents, bank statements, property agreements, and tax returns. The vast majority of grant application forms are online, so make sure you have digital versions of your documents that you can upload.

4. Tell your story

As part of your application, you may have to write out some background information about your business. This may include why you started the business, your plans for the future, why you should receive the grant, how you would spend the grant money, and more. 

Review the objectives of the grant and make sure you reference how you will help meet those goals. Find out the word count and how much you’re expected to write, as it can range from a paragraph to a full page. The grant committee may ask you to fill out a form with this information included, or to write it out as a cover letter. 

More importantly, tell a compelling story. Weave in emotional resonance to help the people reading your application to fully understand and grow attached to you and your business. Highlight the value and impact that you have brought to your community so far, and paint a picture of how the award can help you do more. Write the way you speak, use short sentences, and be specific and inspiring. Read your story out loud to make sure that it flows, and ask someone else who is familiar with your business to review it too. 

In some cases, you may also be asked to submit a video of yourself answering the questions. If so, write out a script and practice in the mirror and in front of friends and family. Get as comfortable as possible with your answers so you can speak as naturally as possible. Record yourself speaking several times, and use the best take for the final application.

Stay safe and vigilant

Unfortunately, there are bad actors out there looking for opportunities to take advantage of business owners. Exercise a healthy amount of caution to protect yourself from fraud anytime you’re sharing private information about yourself or your business. 

Here are some tips to help you stay safe while applying for grants: 

• Research to ensure the grant is provided by a well-known, established organization.
• Never share access to your bank accounts, passwords, or two-factor authentication codes with anyone else. 
• Redact bank account information if you are asked to provide bank statements, and make sure you understand why they’re needed. 
• Read testimonials from previous grant recipients. Look to contact or verify the grant details with previous recipients, or learn about their businesses online.
• Make sure the website or application portal is secure. You can usually check this with the help of your browser, like Google Chrome’s security verification tools. 

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What happens after you submit your application?

Each grant has a different review process, and the length of time it takes can vary anywhere from weeks to months. Check the details, as the review process should be explained on each individual grant’s website.

Once you’ve successfully completed your application, you may receive an email or phone call confirming that it has been received and is being reviewed. They may alsocontact you for additional information or documentation for further review. 

You may be invited for an interview, either over the phone or in person. If so, do some extra research to familiarize yourself more with the grant provider, continue practicing your answers, and read some interview tips. You know your business better than anyone else, so speak from the heart about your story and your plans for the future.

Application outcome

If you don’t end up receiving the grant, ask the organization for feedback so you can understand why your business wasn’t suitable and if there is an opportunity to apply again. Stay optimistic, this isn’t the end. Just because you didn’t win one grant doesn’t mean you won’t get another. Go back to your list of grants and start the process again. 

If you do end up receiving the grant, congratulations! Take some time to celebrate the achievement. Use the answers you gave in your application to begin planning how to use the grant money for your business. Get as granular as possible, and carefully consider how the money can best be used to reach your goals. 

Are you looking to connect with other Square sellers? This guide was inspired by a Square Community conversation. Learn from other business owners who have applied for grants and their experience being awarded funding.