The crux of building a successful business, either online or offline is sufficient capital. With enough money to fund your startup, most other challenges related to running the business become minor. However, the major problem with most startups is that they can’t access enough capital.
To help out, wealthy corporations, foundations, or the government gives a stated sum of money to help grow a business. This money is referred to as a grant, and it differs from a loan that you must pay back within a specific period, usually with interest.
In this article, you’ll learn all you need to know about business grants for startups. Also, I’ll outline some of the advantages of taking a grant and some of the reasons why grants differ from loans.
What are Business Grants?
Business grants refer to a sum of money provided by the government to a business by philanthropists, governments, corporations, or trusts to help in the growth of the business. It is one of the most preferred ways to raise capital for a small business since grants are usually non-repayable.
Many programs are offering mouthwatering grants for startup businesses in Africa. However, most startups and small businesses don’t use these opportunities for several reasons, chiefly because they weren’t even aware it existed.
Since you’re reading about this today, you should consider getting a grant for your business today. There are numerous types of business grants for startups, and most of these types all focus on the monetary aspect.
It doesn’t matter what type of grant you end up taking; what matters is that anything that requires you to give up some equity in your company doesn’t qualify as a grant. Also, anything that forces you to repay with interest is not a grant; those are called loans.
Benefits of Business Grants for Startups
With the basic definition of grants provided above, any entrepreneur can already start seeing the many opportunities it offers over loans and similar kinds of external sources of revenue. However, relying on commonsense analysis doesn’t always paint the bigger picture, at least, not as clear as what research offers you.
According to experts, here are some of the biggest benefits that a grant could offer your business, making business grants for startups very attractive.
Access to free money to start a business
Regardless of what you may read elsewhere, the primary reason why applying for a business grant is an excellent idea for your business is because it offers free money if you could manage to secure it. You’re not obligated to repay any money you get from a grant, making the offer even more enticing to business owners.
Unlike loans that may require collateral, grants don’t, and you don’t even have to do away with your company’s equity. In essence, a grant is a perfect way to access money without ever having to pay it back, grow your business quickly, and avoid debt.
Opens the door to more opportunities
Winning a grant is often a big deal to most businesses. In addition to the hefty sum of money you get almost for free, you’ll get exposed to many investors looking to invest in upcoming businesses. Once the presenters find you worthy of a grant, you don’t need complicated presentations to show investors that your company is on the right path.
The reason why it usually happens this way is due to extensive vetting that happens before an organization, a corporation, or a trust awards a grant. Since it’s more of a gamble, it’s crucial to do some due diligence to ensure they’re giving it to the most deserving business out there.
If the awarders did the necessary due diligence and found you suitable to handle the grant, why do investors need to do the same thing? This process qualifies you to be a rising star, giving you an extra burden to prove them right.
Likelihood to receive other grants
This advantage is more or less an extension of the preceding one. When you win a grant, it makes it more likely for you to get recommended for more, and if you’re interested, your business could win even more grants.
This effect is known as the waterfall effect, and it happens across all industries. Getting many grants from different philanthropists offers you enough money to grow your startup, effectively solving the funding problem that plagues most of the startups across the industry.
How to Apply for Business Grants for Startups
There are hundreds of business grants for startups available in the United States and Africa, depending on where your business is primarily located. If you have a business based in Africa, you have a better chance of getting a grant, since the competition is lower and most people still don’t understand how grants work.
Here are some of the steps required to get business grants for startups anywhere in the world.
Research grants that you may be eligible for
Most corporations and philanthropists giving out grants have a targeted audience for their money. While some only want firms in the technology sector, some want people who are making strides in the agricultural industry for the country.
Before writing out applications for grants, consider reading through the terms and conditions to ensure you’re eligible for the funding. Applying only to relevant ones will increase your chances of getting a successful reply in the long run. It’s essential to note, however, that there isn’t enough to go around, and not everyone can get a grant for their business.
If you have a business targeted at Africans, you may want to consider applying for the Unilever Young Entrepreneurs Award, the Innovation Prize for Africa, or the Tony Elumelu Foundation Entrepreneurship Program. All of these minority small business grants may be insanely competitive, but they’re rewarding if you can manage to win any of them.
Register and apply for the grant
After collecting as much information as possible and establishing that you indeed qualify for the grant, you should prepare and apply. There is no perfect way to write a grant application; simply follow all the requirements on the official resource offered by the awarder and ensure you provide as much information as possible.
After applying, you may also have to follow it up after a few days or weeks. If the awarders request any new information, you should provide it as soon as possible if that aligns with your conditions of service.
Complete secondary requirements
After receiving your application, the presenters of the grant may invite you to demonstrate why your business is the best for the financial gift. Here, you’re expected to make an excellent presentation that shows all the positives of your company using precise, measurable, and citable data.
You should also outline why your business needs extra funding and why you think the grant is the best way to fund your website. To help you with this, you can try reading up on the previous winners of the grant, how they presented their businesses and the unique argument that got them the money.
You must try to replicate the masterpiece to the best of your ability to remotely get a shot at the grant. If you make a presentation that’s as informative as should be, you should get the grant, easing any money-related issue that may be plaguing your business startup.
Business Grants for Startups Businesses
If you have a business based in Africa or the United States, there is a wide range of grants available to you. To save you the trouble of having to manually scour the internet for grants that your business may qualify for to help provide necessary funding for your startup.
Here are some of the most promising small business grants for startups that you should consider applying to for additional capital for your business.
If you have businesses based in any African country, the Seedstars World grant offers a once-in-a-lifetime opportunity to get adequate funding for the business. While it’s open to anyone with a budding business in Africa, it’s primarily targeted at entrepreneurs with startups in the web and mobile tech sector.
If that sounds like your business, you can apply for the grant on their official website. The chances of winning the grant aren’t very attractive, but there’s a non-zero chance that you’ll be one of the lucky entrepreneurs.
If you’re a lady with a business based in the United States, you may want to consider applying for the Amber Grant, which is specifically targeted at that audience. WomensNet has been awarding the grant for decades, and they give out $30,000 in grants monthly.
Unilever Young Entrepreneurs Award
If you run a one-of-a-kind business that tackles some of the challenges facing the world, you may have an excellent shot at the Unilever Young Entrepreneurs Award. Numerous African entrepreneurs have been recipients of this grant, and there’s nothing really stopping you from being one of them.
One of the best sources of funding for businesses is a grant, and there are enough grants for startups to give you a chance at winning one. However, it’s essential to note that only around 200 grants are awarded for every 2,700 applications in the United States.
While those odds aren’t too terrible, it shows a trend: the majority of people who apply for free grants to start a business will never get it. By following the tips mentioned in this article, however, you’ve successfully increased your chances of winning one of the grants for startups in the US and Africa.