4 Reasons Small Business Grants Are No Guarantee | Behalf
4 Reasons Small Business Grants Are No Guarantee
If you’re like many small business owners, a business grant isn’t the first thing you think of when looking for ways to finance your business. You may think more along the lines of a bank loan or a cash advance. Nevertheless, business grants are a perfectly viable way to finance your business. They are not for every business model, but they work well for businesses looking to gain traction with government agencies that support meaningful initiatives. This article gives 4 reasons small business grants may or may not be the best financing option for your business.
Business grants are notoriously strict. You cannot use a business grant to pay for just any business related expenses. If you are looking for financing to do any of the following, a grant is not for you:
– Start a business
– Cover operational costs
– Pay off debt
Even if you do not use the business grant for any of the above reasons, you still must report your activity and fill out the corresponding paperwork. Your grantor will have specific rules for you to adhere to, because they will have to answer to their donors.
2) Play Hard to Get
Applying for a business grant isn’t easy but it could be worth your while. You should expect to spend a lot of time on the application. If you’re a first-timer, you should hire someone with experience to learn how to apply for business grants the right way. There is a science to applying and you do not want to wing a business grant application. It would be a huge waste of time.
3) Gotta Give to Take
A common misconception about grants is that they are all free; that is not necessarily the case with a business grant. In some instances, you will have to match the funds your grantor gives you. Most business financing methods require you to pay fees but they rarely total 50% of the amount borrowed. Your business may not be in the position to do so, and there are more affordable options.
4) Not for Everyone
Not every business is eligible for a business grant. Business grants are only awarded to businesses that contribute to the greater good of society or serve an agenda that aligns with a particular government agency. A medical research firm or renewable energy company is more like to get a business grant because they further social progress. There is an ethical aspect to business grant awarding. You need to make a good case for how your business benefits society. The grantor will determine if they believe it is a meaningful investment. There are specific small business grants for different initiatives.
Whether you are one of the lucky few businesses that qualify for a grant or not, there are simpler, more affordable ways to finance your business. Small business grants are just as exclusive as bank loans and even if you do qualify, grantors severely limit what your business can do with their funds. Look for alternative lenders that offer flexible financing on your terms.
Business Financing With Behalf
Behalf offers a purchasing line of credit for your small business, allowing you to finance business purchases, inventory and production. With no hidden fees, Behalf offers a transparent payment structure that works with your business. Their flexible terms allow you to customize your payment schedule, giving you up to six months to fulfill payment for purchases. Behalf believes in the power of small businesses and you do not have jump through hoops to convince them of your business’ potential.