In the face of economic hardships, states and governments usually give incentives to companies and individuals to start businesses or improve on their current businesses. This is to bolster productivity and to help raise consumer demand. This assistance can come in the form of business grants, which are not only offered during times of recession, but usually all-year round, to companies and individuals who are deserving of aid.
Business grants can also be offered to individuals who are looking into running home-based businesses. Financiers often find value in such a business setup, because overhead cost is low, and the entrepreneur is usually flexible in his operations. If you think you could use extra resources to finance a planned enterprise, or to help keep your company afloat, then a small business grant might be ideal.
The types of business grants. Financing organizations and governments usually offer two types of business grants. One is a free grant, in which funds are donated to a deserving organization or business for fee. This means that the business no longer needs to repay the money, but usually conditions are laid out for the grant. Another is a small business grant loan, in which money needs to be repaid, usually at a lower interest rate than with banks, if any. In these cases, conditions might be lighter or nonexistent altogether.
Where to look. The first place to look for business grants would be the US Small Business Administration (at www.sba.gov), which provides assistance to small businesses. You can also look among foundations backed by large corporations, as they also often provide grant financing to reduce their tax liabilities.
Applying for a grant. The first question usually asked is whether your business or enterprise is eligible for a small business grant. Usually, free grants are given to non-profit activities, like preservation of artwork or historical monuments and places, or just about anything that can benefit the community as a whole. But small businesses that are for-profit may also be eligible, especially if it's for a new business with an innovative idea.
Applying for a grant usually involves writing a grant proposal, which would include your business idea, your eligibility, the plan for turning out a profit, and indications that your business has long-term viability.
Conditions and requirements. If you are considered for business grant financing, you would usually have to agree to certain conditions and requirements that are tied to the financing. For example, financing by the government might come with certain requirements that your business reduce its carbon footprint. Or you might have to purchase supplies and equipment from a set list of approved contractors and suppliers.
At the very least, the recipient of a grant would have to be transparent with how the business spends the grant financing, such as by regularly sending the financing institution detailed reports on how the money is spent.
Grants and other forms of aid enable governments, corporations and foundations to help spread resources around, such that everyone reaps the benefits. If you run a small business, then you might be able to get extra money from business grant financing.