This bucket often gets overlooked, but it should be an important focus. Government agencies provide financing such as grants and subsidies that may be available for your business. Local Government website provides a comprehensive listing of various government programs in different levels. You should have in mind that getting grants can be tough since there may be strong competition and the criteria for awards are often stringent.
Generally, most grants require you to match the funds you are being given and this amount varies greatly, depending on the granter. For example, a research grant may provide you only with 40% of the total cost.
Generally, you will need to provide:
- A detailed project description
- An explanation of the benefits of your project
- A detailed work plan with full costs
- Details of relevant experience and background on key managers
- Completed application forms when appropriate.
It is important to check your area on the county and municipal level because most communities have some sort of local programs to help minority entrepreneurs get extra help to build businesses.
Most reviewers will assess your proposal based on the following criteria:
- Assessment of expertise
- Need for the grant
Some of the problem areas where candidates fail to get grants include:
- The research/work is not relevant
- Ineligible geographic location
- Applicants fail to communicate the relevance of their ideas
- The proposal does not provide a strong rationale
- The research plan is unfocused
- There is an unrealistic amount of work
- Funds are not matched
- Loans or lines of credit.
If your company needs only a temporary or small infusion of cash, try for a Small Business Administration loan (offered at a lower interest rate because it is guaranteed by the government) or a bank line of credit.