Grants are funds awarded by government agencies, foundations, and corporations that you don’t need to repay. As such, grants can be an important source of growth for small businesses.

Additionally, there are a number of grants designed specifically to help certain types of businesses. These might be businesses in a specific industry, started by women, run by veterans, and so on.

If you’re interested in using a grant to help fund your business, consider these tips.

1. Know where to look

There are a number of city and state governments that offer grants to small businesses. For example, Connecticut’s Small Business Express Program offers grants to small businesses intended to stimulate job growth. The city of Chicago’s Small Business Improvement Fund helps small businesses in certain neighborhoods with property improvements.

Learn more about grants for diverse small business owners. The federal government’s Economic Development Agency can help you find information about funding opportunities in your area. You can also research grants at the Small Business Administration website.

  Tip  

Ask your network about grants they’ve heard of in your industry or area, or whether they know of funds aimed at helping women.

2. Be prepared to apply

Applying for a grant can be tedious — you’re usually asked to supply a significant amount of information. But it’s important to be thorough, since it can increase your chances of receiving the grant. 

You’ll likely need to share details about your business, its finances, and how the grant will be used. The entire application process typically takes at least six weeks and may include several rounds of meetings and/or review. Even after that, you may wait another six to 12 months to get a response. 

If you don’t receive a grant on your first application, be prepared to try again. Some companies submit dozens of applications before being chosen.

  Tip  

Depending on your cash flow and the size of the grant in question, it may make sense to hire a professional grant writer to help with your proposal. If you don’t have the funds to hire a professional, ask your network if they have any experience applying for grants; you could discover helpful advice.

3. Be both realistic and optimistic

In exchange for not having to repay the money offered in a grant, they often come with terms and conditions for how the money is used. Government grants often have stricter requirements than those from private corporations (since they’re funded by taxpayer dollars).

The good news is, you may be able to apply for multiple grants to fulfill different needs within your business. Plus, some grants can be renewed if you’re able to verify that you’ve used the funds as prescribed.

  Tip  

Keep detailed financial records, even though you don’t have to repay the money. This can help you prove you’ve used the funds as they were intended, should anyone ask.

Grants can be a great way for businesses to acquire funding, but since they’re “free money,” competition is stiff, and the process can be time-consuming. Do your research to make sure you’re a good fit for the grants you apply for, make sure you include all the necessary information, and don’t be afraid to tap into your network for help with your applications.