Getting grants from the federal government for your business is possible. The key is making sure you have resources available to locate and respond to appropriate federal grant opportunities. Knowing where to look for federal grants is the first step in the process.
The Small Business Administration (SBA) does not provide direct grants to businesses. Businesses can get small business loans, but these have to be paid back. While grants do not have to be paid back, be aware of any matching requirements with federal business grants. If you are not careful, grants with matching requirements can cost you more than you will benefit.
The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grant programs offer multi-phase grants to businesses across industries. Grants focus on technological advances and high-risk fields such as energy, health care research, and defense. The government is particularly interested in ideas that can benefit the entire country rather than just one business.
One thing to keep in mind with federal business grants is that by accepting the grant money, you give the government exclusive rights to your idea or product. They can sell, license, or otherwise use it as they see fit. Small businesses are not always fully cognizant of this caveat when applying for federal grants. That being said, there are great opportunities for businesses to receive grant funds from the federal government.
If you are a manufacturer, check out the U.S. Department of Defense for competitive business federal grants. Hundreds of grant opportunities are posted every year from each unit within the Department. If you have an IT idea you want to develop, a grant from the National Science Foundation (NSF) or even the National Institute of Standards and Technology (NIST) may help bring your product to market. NSF grants range the spectrum from cyber technologies to engineering strategies. Practically every industry is eligible for NSF grants. Businesses may be required to partner with accredited universities for research and publication purposes.
All business federal grants have strict deadlines for application submission. Do not be surprised if the majority of these grants are reimbursement-based. This means you will have out-of-pocket expenses before you see any of the money. It generally takes up to six months for initial grant approval and contract execution. It will be another two to three months before you receive any grant funds.
Paperwork involved in executing a business grant award can be overwhelming. So, while federal business grants can be great resources for growing and expanding businesses, they are by no means the way to fast cash.