Running your retail business comes with multiple things to think about every day so that it can operate smoothly. As most aspects of planning, growing your company, and making improvements require financing, money remains one of the key components that entrepreneurs often worry about. Below, we provide options for small business grants that can support their owners.
General Small Business Grants
These grants offer non-repayable financing for startups and existing businesses in specific industries and demographics. You can get them through Small Business Administration (SBA) local development centers, state agencies, and the Grants.gov website. The most common options include:
- National Association for Self-Employment (NASE) Growth Grants. NASE grants are awarded quarterly for four winners, allowing them to get up to $4,000 to grow their businesses.
- U.S. Department of Commerce Minority Business Development Agency (MBDA). This network of programs targets minority-owned businesses and supports their growth. Each program targets a specific minority category, for example, American Indians, Alaska Natives, Native Hawaiians, or women of color.
- Awesome Foundation Grants. Awesome Foundation is a global community that issues micro-grants of up to $1,000 each month to bring brilliant and crazy business ideas to life. The foundation also supports novel or experimental businesses.
- The Freed Fellowship Grant. Through this grant, a chosen Freed Fellow business owner will receive $500 to invest in their company growth and can become eligible for a $2,500 year-end grant. Every submission gets feedback with recommendations on growing your business.
- Storefront Opportunity Grant. This option provides funding from $25,000 to $100,000 to help small businesses that open brick-and-mortar locations offset frost-year operating costs. To qualify, you need to have a revenue-generating business for at least 3 years, 100 or fewer employees, and $5 million or less in annual revenue. Eligibility may vary by location.
- U.S. Economic Development Administration (EDA). As a part of the U.S. Department of Commerce, EDA provides financial support to businesses that boost regional and national economic development.
Smart Loan Options from Digital Lenders
Financial strains often hit small businesses the hardest. When you’re just getting a retail business off the ground, scrambling to cover the cost of a damaged roof or flood repairs can be overwhelming. In such a situation, small loan lenders in the USA can provide much-needed support without the need for expensive paperwork associated with taking out a loan from lenders certified by CDFI. Most of these companies have installment loan assistance for entrepreneurs who want to grow their respective retail companies. This type of loan helps businesses build solid disaster preparedness plans ahead of time and offer emergency funding when the unexpected strikes.
To qualify for funding, businesses simply need to complete a straightforward application process. It typically involves filling out an online loan request form and attaching copies of your basic documents, such as your ID, proof of address, and income confirmation. Funding typically takes 1 business day. Just note that interest rates may be higher compared to CDFI or traditional financing options.
Government Contract Assistance
The government reserves at least 23% of contracting dollars for small businesses seeking to secure government contracts. Such assistance is primarily available through the SBA and the Department of Defense. Here are the four options available:
- Women-Owned Small Business Federal Contracting Program. The federal government awards at least 5% of contract dollars to small businesses owned by women.
- Service-Disabled Veteran-Owned Small Business Program. Minimum 3% of contracts must be secured by veterans or service-disabled veterans running small businesses.
- HUBZone Program. Under this program, businesses located in historically underutilized business zones get preferential consideration.
- 8(a) Business Development Program. The program targets socially or economically disadvantaged business owners.
Natural Resource Sales Assistance Program
The Natural Resource Sales Assistance Program, created by the SBA, channels a certain percentage of the natural resources and surplus property sold by the federal government to small businesses through bidding. Sales occur in five resource categories: “timber and related forest products,” “strategic materials,” “royalty oil,” “leases involving rights to minerals, coal, oil, and gas,” and “surplus real and personal property.”
Federal agencies may also divide surplus materials into smaller lots that are much easier to purchase for startups and small companies. On top of that, the program allows small businesses to participate in training on government sales and leasing.
Final Thoughts
For many small retail businesses, grants can be a great source of financial support. Entrepreneurs can use the funds to cover operating costs, grow sales, and improve processes or their company’s presence. Just note that getting free money from the government or community services often comes with extensive paperwork. Before applying, check eligibility criteria, application requirements, and deadline.
FAQ
What is the most important funding source for small businesses?
Personal savings and retained business revenue (bootstrapping) are the most common and important funding sources for small businesses. Other options could be: grants, cash advances via online app, and government contact assistance. Those could be used at certain stages to support growth or make it easier to maintain stability during tough times.
How to obtain a grant for a small business?
Grants are awarded based on your preliminary application. The application process and deadlines may vary by program, so check out the website of an agency or company awarding this particular grant. In most cases, you will be asked to provide a set of documents, including tax returns, a business plan, and bank statements. Specific eligibility requirements associated with legal registration, operational history, and financial limits may apply.
How to get funding for a retail business?
If you search for non-repayable options, consider grants based on the amount you need, the goal, and your company’s specifics. Alternatively, you can turn to loans from online loan companies or SBA- and CDFI-certified lenders. If your retail business is designed to support communities, you can also launch a fundraising program.
