How To Find Financial Aid To Pay For Small Business Needs?
In today's economic climate, many small business owners are struggling, and finding financial help can be challenging when you don't know where to turn.
Fortunately, there are resources available from both the government and private sector that might just save your company—or at least make things easier on everyone involved.
But your business doesn’t have to struggle, instead your focus should be on finding the right means and systems you can use to support your business idea. It can be difficult to get started in the business world, especially with lots of competitors. Yet there are a plethora of ways to generate some funds in the beginning.
In this article, we'll explore some of the different options available to small business owners regarding financial aid and how to access it. We'll also look at what kinds of businesses are most likely to be awarded financial aid.
What is considered a small business?
It helps to know what is defined as a small business, for many reasons. For starters, if a company is seen as a small business, it can have access to benefits and advantages that you rarely get to see.
The Small Business Administration (SBA) defines a small business as one with 500 or fewer employees (employees with W2 forms). However, other government agencies use different definitions, so make sure to contact the corresponding department before assuming you are ineligible for assistance. Even if you have more employees, it still makes sense to contact governmental agencies, because you never know your eligibility. You might still be eligible in some cases, and it always comes down to addressing this appropriately and understanding all the pros and cons.
What is financial aid?
Financial aid is any form of assistance offered to businesses or individuals needing funding. This assistance can come in grants, loans, investment capital, or other forms of support. As a small business, you want to receive all the help you can get. It doesn’t matter if it comes in the form of a few dollars or many thousands of dollars that you receive overtime. At the end of the day, every single extra dollar counts, and it might help you get closer to your goals.
There are several reasons why small businesses might need financial aid. Perhaps you're starting a new business and need to get up and running quickly, or your company has hit a rough patch and you need some extra cash to keep things afloat.
Whatever the reason, there are various options available to help you get the funding you need. It just comes down to knowing where you can acquire funds from and how much you can get. In most cases, you will see there are a plethora of different financial aid systems. Some of them are restricted to specific industries, others less so. That’s why it makes sense to do your research and see what you can get in return. It’s never going to be simple to acquire financial aid right away, since it does involve applying for it and meeting certain criteria.
Yet even so, it makes sense to apply to any source of financial aid that you can. Why is that? It will give you a great set of opportunities, and you might even receive the funds you need. Sure, it might take a while for that to happen, but even then, you can apply for free in most cases, and the returns can be exceptional.
How can I find financial aid for my small business?
There are several ways to find financial aid for your small business. Even if one of them might not work out, you should consider trying all of them. After all, you never know where you can get a positive reply. While there are requirements for each one of the funds, we still believe that these are a great way for you to get started as you accumulate more funds.
Yes, there are angel investors and other ways to generate funds, but those will also require something from your side. These financial aid sources are offered by various grants and governmental institutions, so they are a much better source of funding, especially for a smaller business. Here are just a few:
Federal Stimulus Funds
With the COVID-19 pandemic taking its toll on businesses, President Biden has come up with an emergency stimulus bill to help companies get back in business. The 1 trillion dollar proposal includes tax credits, loans, and grants for those who have been struggling because of the recent pandemic.
Grants.gov
Grants.gov is the ultimate website for finding a grant from the federal government. This site offers thousands of opportunities with all sorts of different requirements and backgrounds, so it's perfect if you're looking to apply or want more information on how grants work in general. It always depends on your background, what niche you are working in and other factors. Yet even then, it’s a solid option for funding, because there are new grants being added all the time. That helps you eliminate any worries, while ensuring you always have a very good return in the long term.
Other Government Agencies To Check out:
- NIDILRR's SBIR program: This program offers grants to businesses with fewer than 500 employees working on innovative products or services that could improve the quality of life for people with disabilities.
- The Department of Agriculture's Rural Business Development Grant: This grant is designed to help rural businesses grow and create jobs. It offers funding for various purposes, including starting or expanding a business, purchasing equipment or technology, and training employees.
- Small Business Administration (SBA) Loans: The SBA offers different types of loans to small businesses, including startup loans, disaster assistance loans, and loans for women and minorities. You can learn more about all of these options on the SBA website.
- Rural Innovation Stronger Economy (RISE) grants: This grant from the Department of Agriculture is specifically for rural businesses expanding or starting up. It offers funding for different purposes, including purchasing equipment or technology, marketing and advertising, and training employees.
Accepting financial aid from the government comes with a lot of paperwork, as you might expect. From submitting and creating your 1099s to filing them directly to the agency—grant applications may be time-consuming and complicated. As a result, you should double-check your eligibility and requirements before applying.
Private Sector Grants
Grants and other assistance are also available from many nonprofit organizations, including those that fund small businesses:
- GoFundMe Small Business Relief Fund: This fund is designed to help small businesses impacted by COVID-19. The fund is backed by GoFundMe and corporations like Intuit QuickBooks, GoDaddy and Yelp! Small businesses can add the hashtag #SmallBusinessRelief onto their campaign or fill it out on their website.
- The Barstool Fund: This incentive is for COVID-19-affected small enterprises that retained their staff during the crisis and have a track record of success. Winners are selected on a rolling basis, so apply now for a chance to get financing for your company.
- FedEx Small Business Grant Contest: FedEx has been awarding $25,000 to businesses every year since 2013. This grant is for businesses with fewer than 500 employees who demonstrate innovation and profitability. If your business is selected as a finalist, you'll attend an all-expenses-paid trip to FedEx headquarters in Memphis to compete for the top prize.
- Visa Everywhere Initiative: Visa is awarding up to $100,000 in grants to businesses of all sizes working on innovative solutions to help people during the COVID-19 pandemic. This grant is open to businesses in any country, and the application process is simple.
Final Thoughts: Financial Aid
If you're a small business owner, don't be afraid to ask for financial aid from the government or private sector. There are many programs available, and chances are you'll be eligible for at least one of them. Eligibility is a major factor here because sometimes you are eligible, other times less so. That’s why you want to check every source of financial aid and see if you are allowed to apply for it. In most cases, you might be eligible, but other times less so. Don’t be discouraged if, for some reason, you can’t apply for financial aid in one situation. There are plenty of options in general, so check them out.
Just be sure to read the eligibility requirements and application process carefully, so you don't waste your time applying for a grant that you're not eligible for. Since there are so many options to apply for, at the end of the day you want to streamline your time and expectations. We think that a good financial aid source will give you an exceptional ROI, and applying to those where you have a higher chance of winning is the ideal option to focus on.
And remember, there's no shame in accepting financial aid; it can be the difference between keeping your business open and having to close your doors. Make this a fresh start while building back and developing your business strategy going forward.
