Looking for a way to get some cash for your small business? A loan isn't your only option: Many government organizations offer grants to local businesses that meet certain eligibility requirements and qualifications.
"Each state and county has access to funds to help small business owners obtain the capital needed to add [things like] jobs, equipment or real estate," said Kyle Dixon, CFO of snack food company Cosmos Creations.
In addition to government grants, entrepreneurs can also apply for grant offers from certain banks, companies and nonprofits. Some programs even offer special grants for small businesses that are engaged in research and development. [Applying for a Business Grant? Here's How]
However, don't confuse a business grant with a loan.
"It is important to keep in mind the difference between grants and small business loans," said Bill Drewes, a New York-based attorney and grant writer. "Grants generally don't require any major portion to be paid back, and are very few and far between."
Loans, while much more readily available, have to be paid back with interest, and often require personal guarantees on the part of the business owner, Drewes said.
Because grants are generally not expected to be repaid, they aren't given to just anyone. Most organizations have very strict guidelines and reporting measures to ensure that grant recipients use the money wisely. A Small Business Administration article on government grants noted that grants aren't necessarily free money, and may require you to match or combine the grant with other forms of financing.
"Make sure you know [what the grantor expects you to do] and what the timeline is," Dixon added. "Some grants may have to be paid back if you don't hit the benchmarks."
The process of finding and applying for a small business grant can be difficult, so make sure you seek help from a financial professional.
"There are a lot of rocks to turn over, and you need to find a couple of contacts to help find all of them," Dixon told Business News Daily. "There are a lot of different funding sources available for growing businesses that are adding living-wage jobs with benefits. Talk to [your local] Chamber of Commerce if you don't have any other contacts."
For more information on business grants or to research federal, state and local grants that you may qualify for, visit the SBA's website.
Originally published on Business News Daily