By Julio Gonzales.
[Read Part II.]
What’s one of the biggest challenges that small businesses face? Lack of funding. Loans are an option, but they’re not always easy to attain. In fact, large banks only approve 25% of Small Business Association (SBA) loans.
Many of your clients are likely in need of funds for their businesses, and they may have overlooked one valuable source of funding – grants. Grants are free cash that doesn’t have to be repaid, allowing your clients to grow their businesses or realize their project goals without worrying about repayment terms.
You can help your clients get access to grants, which are available from a wide range of sources. In this 2-part series, we’ll take an in-depth look at the grant process, from the research phase to navigating the application process.
Start with a Grant Readiness Assessment
Before you dive into the grant research process, take the time to determine whether your client is ready to consider grant funding for their business or project.
Ideal candidates for grants are:
- Businesses looking to expand or develop a real estate project
- Scaled non-profits
- Certified minority-owned companies
Of course, other businesses can also qualify for grants, but those that fit into the categories above are ideal candidates.
Additionally, you want to consider whether the client:
- Already has a business plan or project description
- Budgets for the project
- Has the appropriate documentation or conceptual drawings to support the project
If your client passes the readiness test, then you can begin the process of finding grant opportunities.
Understand the Types of Grants Available to Small Businesses
There are several different types of grants available to small businesses. Some of the most common ones include:
Capital
Capital grants are finite and have a specified objective. Typically, businesses seek out these grants for the purpose of gaining capital. For example, a company may use the funds from a capital grant for:
- Land purchases
- The construction of a new building
- The purchase of new equipment
- Restoration or renovation
If a client is looking to acquire a tangible asset or material, then a capital grant may be worth considering.
Project
Project grants are grants awarded to specific projects with clear objectives, timelines and budgets. Funds are used to realize the project’s goals or produce a specific deliverable.
In many cases, project grants are provided by governments (federal, state and/or local) and awarded based on merit. Projects funded by grants may benefit the community or serve another particular purpose, such as education.
Matching
A matching grant requires the applicant to match the grant’s funds with their own. In order to be awarded funds, they must put in an equal amount of their own money.
The purpose of these conditional grants is to encourage organizations to raise funds and increase revenue and/or contributions.
Matching grants will specify how these funds can be raised, and they are typically sought after by non-profit organizations.
Operational
An operational grant is sometimes referred to as an unrestricted grant. Just as the name suggests, these funds can be used to support the company’s general mission and cover the cost of overhead. Essentially, businesses have the freedom to use these grants however they see fit.
Operational grants are highly sought after, so the competition is fierce and the application process is laborious.
Small business grants can come from a range of sources, including but not limited to:
- The federal government
- The state government
- Corporations
- Local municipalities
- Private foundations
You can find a list of available grants from:
- The Small Business Administration
- The USDA
- Grants.gov
- The Department of Energy
- The U.S. Environmental Protection Agency
Keep in mind that this is not an exhaustive list of grant resources. Many corporations and private foundations also offer grant opportunities, so be sure to explore these as well.
Research Grant Eligibility and Requirements
Finding grant opportunities is just the first step. Once you’ve identified opportunities that may align with your client’s company or project, you need to consider the grant’s eligibility requirements.
Conduct a thorough review of each potential grant and its eligibility requirements to determine whether it would be a good fit for your client.
Depending on the grant opportunity, clients may have some work to do. They may need to prepare supporting documents or clarify the details of their project.
The Next Steps
Once you’ve created a list of grants that your client is eligible for, the next step is to start submitting applications. In part 2 of this series, we’ll take a closer look at the grant application process, including how to prepare, submit, and follow up on a submission.
====
Julio Gonzalez is truly the nation’s forefather of specialty tax services. His focus is bringing specialized engineering tax studies to mainstream America, which historically had only been available to Fortune 500 and public companies through national accounting firms. These tax services are critical to creating, preserving, and maintaining U.S.-based jobs. Julio is the CEO of Engineered Tax Services, The Growth Partnership, ABLE: CRM for Accountants, and INSIDE Public Accounting, the founder of Rockerbox, and the developer of the Engineered Tax Services cost segregation app.
Additionally, Julio works weekly with the Administration, Congress, and Senate to advise on tax reform. He is the go-to tax expert, representing many national organizations and associations. He is a regular national public speaker regarding tax reform and tax sophistication for wealth preservation. To get in contact with Julio or learn more about how you can partner with Engineered Tax Services to grow your firm or better serve your clients, please contact Julio through his website.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Advisory, Small Business
