Merchant Grant SBA: Key Benefits and Advantages for Entrepreneurs

With the help of the Small Business Administration (SBA), countless entrepreneurs have been able to start and grow their businesses. The SBA is a U.S. government agency responsible for providing financial assistance to small business owners. While it may sound counterintuitive, the SBA doesn’t provide grants directly to small business owners. Instead, the agency provides grants and loans through lenders who make some of their own terms and then offer loans directly to business owners.

In this article, we'll explore the types of grants available for small businesses and where to find them.

Key Points:

• Small business grants are an important source of financial support for small businesses and can help them get started or keep operating.
• Grants are typically offered by local, state, and federal governments, as well as nonprofits and private businesses. 
• Grant applicants should take the time to research the availability of grants, understand the requirements and qualifications, and apply for multiple grants to increase their chances of success.
• Grants are typically awarded based on the project’s worthiness, so having a well-thought-out plan and proposal is essential to success.

About the SBA Grants Program

The SBA grants program provides financial assistance to small businesses and entrepreneurs to start or expand their businesses. There are several decision-making criteria and requirements that must be met to be eligible for an SBA grant. It all depends on the exact grant you’re looking for.  

SBA grants don’t require repayment of funds, making them a highly sought-after financing option. These grants are considered an investment from the federal government in the success of these businesses. 

What’s the Difference Between an SBA Loan and a Grant?

An SBA loan and a grant are two different types of funding that small businesses can access. An SBA loan is money that a small business borrows from a lender, such as a bank, credit union, or other financial institution. The loan must typically be paid back with interest and often requires collateral. On the other hand, a grant is money that is given to a small business or individual by a government agency, foundation, or other organization. It does not have to be paid back and does not require collateral or a personal guarantee.

A key difference between an SBA loan and a grant is that grants are typically awarded based on an application process and demonstrate an organization’s commitment to the success of the business. Grants may be used to cover a variety of costs such as training and start-up expenses, research and development, marketing, or special project costs. An SBA loan, on the other hand, is primarily used as a form of financing to purchase or upgrade business assets such as inventory, equipment, and real estate. 

What Grants Does the SBA Offer?

The SBA offers a variety of grants for small businesses, with the most popular type being a small business loan. However, the SBA also offers a select number of grants that are specifically designed for small businesses.

Grants from the SBA are typically reserved for a few types of small businesses:

• Those engaged in scientific research and development.
• Those that provide management and technical assistance to other small businesses in certain regions. 
• Businesses in underserved communities.

The grants available from the SBA are often competitive, as there is usually a limited amount of money available. When applying for a grant, it's important to make sure that your research and development project or management and technical assistance program is aligned with the mission of the SBA. This could mean that you are helping to create jobs in a distressed area or are investing in innovative technologies, for example.

The SBA also provides grant programs that are specifically designed to help minority and women-owned businesses. These grants are provided to help these businesses access the capital or resources needed to help them succeed, such as training and counseling.

Top 20 Grants and Programs for Small Business Merchants

Small business owners are often overwhelmed when it comes to finding the right grants and programs to help them grow their business. Fortunately, there are a wealth of grants and programs that can make all the difference, from a variety of sources. Here are just 20 grants worth looking into:

• Small Business Innovation Research Program (SBIR). The Small Business Innovation Research program is a federal grants program that provides financial assistance to small businesses to conduct research and development in various technology-related fields.
• Small Business Technology Transfer Program. The Small Business Technology Transfer Program (STTR) is designed to fund research and development activities for small business owners focused on technology fields.
• Department of Defense grants. The Department of Defense provides grants for a variety of small business needs, including research and development, technology transfer, and acquisition.
• National Institute of Health (NIH) grants. The NIH provides grants for a wide range of research initiatives, from basic to clinical research.
• Department of Justice grants. The Department of Justice provides grants for initiatives related to public safety, victim services, and criminal justice.
• USDA Rural Development Business grants. The USDA Rural Development program helps small businesses located in rural areas access capital in order to improve or expand their operations.
• The Amber Grant Program. The Amber Grant Program provides grants and coaching to female entrepreneurs in the early stages of their businesses.
• Minority Business Development Agency (MBDA). The MBDA provides loans, venture capital, and other financial resources for minority-owned businesses.
• American Express OPEN grants. American Express provides grants to small business owners to help them develop and grow their businesses.
• The Kauffman Foundation grants. The Kauffman Foundation provides grants to help small business owners in areas such as technology, marketing, and finance. The grants are focused on racial equity and diversity. 
• Google for Startups. Google for Startups provides access to capital and resources for small businesses.
• FedEx Small Business Grant Contest. Each year, this contest awards tens of thousands of dollars to small businesses across the U.S. Business owners can apply online and receive monetary awards in a variety of ranges. 
• Venmo Small Business grant. This grant is open to small businesses that accept Venmo as a payment method. Venmo will award $10,000 to 20 businesses. 
• Hello Alice Grant Platform. This grant platform allows you to browse grants for small businesses that are owned by women and people of color. Business owners can apply and list their businesses on the Hello Alice platform.
• National Association for the Self-Employed grants. This grant is available to self-employed individuals who need assistance starting or expanding a business. NASE offers grants of up to $4,000 to eligible applicants.
• Cartier Women’s Initiative Award. This program, launched by the Cartier Group, provides annual awards to support female entrepreneurs from around the world.
• Tory Burch Foundation Fellowship. This program provides annual mentorship to 50 female business owners and entrepreneurs.
• Operation Hope Small Business Empowerment Program. This program provides business education classes and training to small business owners in underserved communities. 
• The Second Service Foundation. This foundation provides mentorship and various grants to help entrepreneurs and small business owners start or expand their businesses. 
• LegalZoom's Fast Break for Small Business grants. This program provides grants of up to $10,000 to qualified small business merchants, with the focus being on helping those who are creating jobs and promoting entrepreneurship. 

Tips for Finding Merchant Grants for Your Small Business

Starting a small business can be a difficult but rewarding experience. Unfortunately, many new business owners are unable to secure the funds they need to get their businesses off the ground. Fortunately, there are numerous grants out there specifically designed to help small businesses. Here are a few tips to keep in mind:

• Research existing grants. Many existing grants target specific industries or business models. Researching what grants are available can help you quickly identify ones that meet your business needs. You can find some suggestions above, but the SBA provides its list of grants here. 
• Ask local banks. Many banks provide grants to local businesses, or can at least direct you in the right direction. Contact your local banks to see if they offer grants or other financing options. 
• Reach out to your state. Check with your state's small business development center to find out what grants and other funding programs are available in your area. 
• Utilize online resources. There are a number of online resources (like ours!) dedicated to helping small businesses find funding. Utilizing these resources can help you identify potential funding opportunities. 
• Consider private grants. While federal options are undoubtedly popular, there are a number of private organizations that offer grants to small businesses. Research organizations that may be interested in your business model and apply for their grants.

How to Apply for an SBA Grant

Applying for a small business grant can be a daunting process, but researching and taking the necessary steps can pay off in the long run. To successfully apply for a small business grant, you will need to understand the eligibility requirements, fill out the application accurately and thoroughly, and follow the instructions given in the application.

While the official process varies depending on the lender you’re applying through, generally, here’s what you’ll need to do:

• Research, research, and more research. Conduct research to find out which grants you may qualify for and the application requirements. Consider factors such as the size of your business, your industry, and geographic requirements.
• Prepare your required documents. Gather all of the required documents needed to apply. This may include financials, business plans, and letters of reference.
• Read the application carefully. Carefully read the application and make sure you understand all of the requirements before submitting it. If there’s anything you don’t understand, contact the grant lender to ask questions. 
• Submit your application. Submit the application along with any required documents or attachments.
• Stay informed. If you receive a grant, stay in touch with the organization for updates on deadlines and requirements for reporting.

How to Get Your SBA Grant Approved

Getting your small business grant approved can be a daunting process, but it doesn't have to be if you’re prepared. Here are some tips to help you maximize your chances of securing a grant:

• Research the funding program. Start by doing a lot of research into the funding program before you apply. Familiarize yourself with the eligibility requirements and make sure you meet them before you spend time applying.
• Write a strong proposal. Take the time to put together an impressive proposal with a clear description of your business and its goals. Explain the kind of impact the grant money can have, including how it will help you create jobs, stimulate the local economy, or develop innovative products or services.
• Submit all the required documentation. Make sure you submit all the documentation required by the funding organization. Missing or incomplete documentation can lead to your application being rejected, so make sure to double-check all the documents.
• Follow-up. After you submit your application, follow up with the funding organization to check on the status. This will show that you’re serious about the business and invested in the process.

Organizations Offering Business Mentoring and Advice

Starting a business involves a lot of learning. Thankfully, there are a number of organizations dedicated to helping you succeed. A few include:

• SCORE. SCORE is a nonprofit organization that provides free mentoring services to small business owners. They offer individuals one-on-one advisory sessions and online workshops. 
• Small Business Administration. The SBA doesn’t just offer grants and loans, it also offers resources including information on a variety of topics such as starting or expanding a business, developing business strategies, and business financing.
• Small Business Development Centers (SBDC). SBDCs are partnerships between the SBA, state governments, and universities that provide counseling and advice to new and existing businesses.
• Women’s Business Centers (WBC). WBCs are a network of grants-funded programs that provide business counseling, training, and financing opportunities to women entrepreneurs. 
• Veteran Business Outreach Centers (VBOC). VBOCs provide counseling and technical assistance to veteran-owned businesses, including special programs designed to help veteran entrepreneurs successfully transition from the military to their own businesses.

Final Word

Small business grants are an invaluable resource offering significant financial support to aspiring entrepreneurs, with no need for repayment. These grants can provide the funds to help businesses get off the ground, enabling them to achieve their goals and become successful. With the right research and dedication, any business owner can locate relevant grants to apply for and obtain the funding they need.