Trying to fund your small business may feel overwhelming at first, but you can explore several different sources of funding to get your business started. These include examples like traditional small business loans, friends and family, or in some cases, grants.
Grants are financial awards available through the government for many businesses to help fund ideas, projects, and research, which in turn helps to stimulate the economy. They are a funding option for small businesses just starting out or established businesses in need of extra cash flow. With grants, you do not have to pay the money back.
While not every business is qualified for a small business grant in Tennessee, it’s worth the research and time to see if there’s a grant that you qualify for that can help.
What Type of Businesses Can Apply for Grants
Any type of business can apply for a grant from the government. However, it is important to read the requirements and qualifications of the grant to make sure you are eligible before applying; otherwise, you will waste valuable time.
In Tennessee, there are several important sectors of business that grants focus on:
- 11,273 registered businesses in the Professional, Scientific, and Technical Services sectors.
- 6,711 registered businesses in the Administrative, Support, Waste Management, and Remediation Services sector.
- 11,707 registered businesses in the Accommodation and Food Services sector.
- 14,405 registered businesses in service-oriented businesses that aren’t included in the other sectors above.
There are many grants available for all types of businesses in Tennessee, depending on what you are selling, who you are, and if you are just starting your business. Some of the grants from the federal government to small businesses are distributed to nonprofit organizations, colleges, and state governments that set the requirements and may narrow down the recipient pool to a select few.
Requirements for grants, whether from an organization or the federal government, are set based on the small business’s impact on the government or the institution. Two of the most common types of grants you will come across are research grants or grants specifically for non-profit companies. However, this doesn’t mean your new for-profit bakery won’t qualify for a grant. Many grants are awarded to minorities, women, and others trying to better their community.
For example, the EDA, or U.S. Economic Development Administration, awards grants to those who are working in construction, planning, higher education, and more.
U.S. Economic Development Administration (EDA). The EDA is part of the U.S. Department of Commerce and offers ongoing funding opportunities for projects that support regional and national economic development. Applicants can apply for a variety of rolling-basis EDA investments that fund projects in construction, non-construction, planning, technical assistance, research and evaluation, higher education, and more.
Another popular area for grant applicants in Tennessee is rural development. There are many opportunities for small business owners in small towns to be given grants to help stimulate the economy.
Finding Small Business Grants in Tennessee
A quick online search for “small business grants in Tennessee” can yield hundreds of results, overwhelming any business owner. With multitudes of different categories and types of grants to look at, it can be easy to dismiss the whole process.
Instead of throwing in the towel, focus your efforts on a few of the top places to find grants and narrow down the following:
- What type of business do you have?
- Do you qualify for any special circumstance (Are you a minority or a woman opening their first business?)
- What is your geographic area for your business? Aside from rural grants, special grants may be available to certain parts of the country.
- Does your staff have any connections or special interests with organizations that give out grants?
- What is your mission and vision for your business? Finding organizations and grants that align with them will help you have a better chance of receiving the grant.
If you’re not sure where to start, browse through some of the newer grants listed to get a better idea of what is out there and see if your business fits any of them. The more time and research you take to find the right grant for your business, the more likely you are to be awarded it.
Resources for Small Business Grants in Tennessee
The government is one of the main sources of grants for small businesses, and there are several websites to get you started on your search.
- USDA Rural Business Development Grants
- Economic Development Administration
- Minority Business Development Agency Centers
- Small Business Development Centers
Looking beyond the government for grants, a few corporations and nonprofits award grants to small business owners, such as:
- National Association for the Self-Employed
- FedEx Small Business Annual Grant Contest
- StreetShares Foundation – The Veteran Small Business Award
How to Apply for a Grant
Applying for small business grants in Tennessee can be intimidating, with so many options and mountains of paperwork to complete, but they are well worth the time and effort to do so.
All government grants have a similar process, called the grant life-cycle, and it is important to understand how it works when applying for grants:
- Pre-Award Phase – This is the beginning of the cycle when the grant is announced, followed by the submission of applications and review.
- Award Phase – As the name implies, this is when the award is granted. Depending on the grant, it may be decided by a panel or one individual based on recommendations and financial reviews of the applications. Applicants are then notified if they have been given the grant.
- Post-Award Phase – Although grants do not have to be paid back, some have requirements to show any progress (such as research) and completing closeout paperwork. Depending on the grant, you may be audited to make sure you are using the money as intended.
When applying for grants, you will usually need to fill out an application online, just as with other business or personal loans. You may be asked questions about the business, such as what you will use the money for, what makes your business unique, and how much money you are requesting.
Be prepared when filling out the applications and have your business plan nearby and any financial records. Every application is different, and it’s better to have all the information you need ready to make the process less stressful.
Alternatives to Grants for Small Businesses in Tennessee
If you can’t find the right grant for your business or keep getting turned down, there are other sources of funding for your business, such as:
- Small Business Loans – Small business loans require applications just as with grants, but they are excellent choices for those who need extra money for equipment, are a new business, or don’t want to wait for a grant acceptance.
- Small Business Credit Cards – Perfect for everyday purchases, small business credit and debit cards can help you buy what you need for your business to keep it running smoothly.
- Family and Friends, or Crowdsourcing – Don’t forget to ask your friend, family, or community to help invest in your dreams. Crowdsourcing has become a popular way to raise money for all different campaigns; why not your business too?
At SouthEast Bank, we can help you find the right funding for your business to make sure your idea and dreams become a reality. Our team would be happy to discuss the options that may be right for your small business so you can continue to grow.
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Information contained in this blog is for educational and informational purposes only. Nothing contained in this blog should be construed as legal or tax advice. An attorney or tax advisor should be consulted for advice on specific issues.