How to Get Grant Funding for Your Small Business and Avoid Scams

Small business grants, which offer access to capital with little to no repayment requirements, are an attractive funding option for entrepreneurs looking to start or grow a business. However, careful research is needed to find the best fit and avoid scams, according to SCORE, mentors to America's small businesses.

How to Get Grant Funding for Your Small Business and Avoid Scams

Finding and applying for grants

The first step is to identify what types of grants your small business would qualify for. Eligibility will vary based on the requirements of the organization providing the funding. Government agencies are a great place to begin your search, starting with, a comprehensive database of government-sponsored grant opportunities. While the applications may appear daunting, a SCORE mentor can help you identify options and navigate the process.

"The good news is that most grants stick to demographic or industry qualifications―things about you or the area you work in," explains SCORE mentor John Kohl. "You won't find too many grants that have strict revenue or 'time in business' qualifications. That means you can often qualify for grants even if you can't qualify for business loans―making grants great for startup funding."

You should also review any restrictions on how the money can be spent. "Most grants specify how the funds can be used. So, if you want to buy equipment, for example, don't bother with grants that have to be used to hire more staff," said Kohl.

Avoiding scams

To keep your business safe from scams, learn what to watch out for so you can identify red flags. For example: "Legitimate grants do not show up at your door as a surprise—you have to apply for them," advised SCORE mentor Hal Shelton. "So, if you are offered a grant you know nothing about, most likely it is a scam."

You should also be wary of any fees involved. "Asking for an application fee is the number-one way scammers make their money," said Shelton. When in doubt, seek input from a trusted mentor who has business experience.

Ask for help

Mentors can help entrepreneurs looking for funding, whether from grants or other sources, and as a nonprofit resource partner of the U.S. Small Business Administration, mentoring services from SCORE are always free. SCORE also offers workshops and on-demand training. To learn more about Loans, Grants and Other Funding Options for Small Businesses, SCORE is hosting a free webinar on Tuesday, Feb. 6 at 1 p.m. EST. Register here to attend.

"With SCORE you have someone in your corner who can ask you the right questions, connect you with experts, and help you access a world of opportunity," said SCORE client Amanda Chavero, founder of Dear Donor, a fundraising consulting firm in Denver, Colo.

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