Businesses need financial aid for commercial development activities. The most common source of commercial grants is state development departments. These programs offer grants to businesses for research and development of product and technologies ideas that can then be commercialized for wider impact. These funds may also be distributed to local business incubators for smaller projects with the same purpose.
Federal grant programs that target small business development activities such as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs as well as the National Institute of Standards and Technology (NIST) provide awards for commercial projects. Specific federal agencies such as the U.S. Department of Energy and the U.S. Department of Defense (DoD) also offer commercial grants.
The intent of SBIR/STTR is to fund the initial phase of research and concept development. If this proves successful, a second phase is funded for full development and implementation. Both phases require a detailed commercialization plan that generally includes how the government can benefit from the product or technology. Depending on the success of the second phase, a third phase of funding may be provided to explore further applications and uses of the product or technology.
When accepting a federal commercial grant, be aware that the government will have first rights to everything you create using grant funds. This includes technology, software, systems, and other processes. The government can take this information and use it in any way it sees fit. This is detailed in the grant application so carefully review the details before submitting a grant application. Know what your rights are under the grant program. If you are unclear, contact a program officer for additional information.
Most commercial grants are intended to provide wider benefit than the expansion of one business. For example, local commercial grants generally require the creation of jobs be included with the commercial development activity. If jobs are ultimately not created, the grantor can require the commercial grant be converted to a loan that the business has to repay. Businesses should not commit to create jobs if it is not feasible. It may make more sense to simply apply for a business loan for commercial activities.
Commercial grants are an excellent way for businesses to develop new commercial products and processes. You get funding for research and development so you can test the product in multiple stages. These grants can be staff intensive so you will need a primary point of contact responsible for leading grant activities and communicating with program officers as needed. You can partner with other businesses and organizations that may have expertise in areas you do not. This can strengthen your grant request.