Accessing Public Grants to Help Fund Your US Expansion
When most people think of public finding and accessing grants for a project, the first thing that springs to mind is grants allocated to non-profit and charitable organizations. However, there are also grants available to US-based businesses which can be a great source of funding your US venture.
In this section, we’ll discuss what kinds of grants could be available for you to apply for, and how Mount Bonnell Advisors can support you with this process – via grant writing, grant scouting, in-person networking and more.
On This Page
- What are Public Grants?
- Types of Grants Available to For-Profit Businesses
- Federal Grants
- Types of Projects That may be Eligible for Federal Funding
- State Level Grants
- Local Grants
- Misconceptions About Public Grants AKA Are Grants Really “Free Money”?
- Getting Started with Grant Research
- What Counts as a “Small Business” in the US?
- The SBIR & STTR
- Get Expert Grant Application Support from Mount Bonnell Advisors
- Frequently asked questions (FAQs) about taxes, company formaition, and residency in the U.S.
- Get advice on taxation, company formation, and residency in the U.S.
Public grants are money that is made available at the Federal, State and Local level for businesses to use for a variety of objectives. These grants have enabled a huge range of small businesses to grow their company in the US and provide a fantastic source of funding.
Unlike business loans, the sum awarded in a grant does not need to be paid back. With the difficulty that many entrepreneurs face in raising money for their ventures, this is obviously an extremely attractive option – but it means that competition for grants is fierce.
While most of the grants available focus on non-profit sectors, there are grants available to for-profit companies and entrepreneurs. These grants are usually awarded in certain industries or for certain kinds of projects that will bring a demonstrable benefit to certain sectors or communities. For example, a grant might be awarded to a business that plans to expand their workforce and upskill employees, thereby having a positive impact on the local economy.
Grants awarded to for-profit businesses are typically not for general operational costs or for starting a business. They are also not allocated to help to pay down debt.
In other words, a public grant for your business is not a blank check to use however you want for your business growth. Rather a grant is awarded because your project will meet a need that has been identified by the grant funders.
This doesn’t mean your project has to have what you might view as a “traditionally” charitable aim (for example, a project to help underprivileged people or to help with disaster relief). But it does need to have a clear objective that aligns with needs in the US.
Your project should provide some kind of benefit for communities at different levels. Popular areas to receive grants are therefore in technology, sustainability, economic development, and research and development.
There are a wide variety of grants that can be applied for, and each one has their own application rules and criteria. To start to unpick this complex funding structure let’s take a look at how public grants work at the Federal, State, and Local level.
Before we take a look at public grants in more detail it’s important to be aware that there are some opportunities that are only available to businesses that are owned (either individually or jointly by at least one partner) by American citizens / Permanent Resident Aliens.
The federal government allocates a substantial sum of money each year in grant support for a range of programs. These include programs such as community development, education, transport, environmental protection, and economic development.
Grants are awarded in 21 categories administered by 26 different agencies and there are more than 1000 grant opportunities each year. The funding varies, but in 2014 it was $524 Billion. Of that amount, most funding is allocated to not-for-profit projects and around 5% directly to for-profit companies.
This still accounts for a huge $26 billion in public grants, and many of these grants are awarded directly to small businesses, especially in industries such as technology, health, and science. If you are involved with a business that provides research into areas such as research and development or a scientific field such as environmental initiatives then federal grants could be a great source of income.
In some cases, grants are awarded directly by the federal government, but in most cases, they determine eligibility and then allocate funds to state and local governments. These then distribute funds to small businesses. So, you may also find success with grant sourcing via the funds allocated at this level.
The types of project that you may be able to receive a for-profit grant for include:
- Direct Services. These types of grants support activities that provide services directly to the demographic that the funder has identified – for example, training, health, and education.
- Research and Development. The majority of federal grants are aimed at research and development. This can include developing technology, strategy, and other business approaches.
- Innovative Technology & Commercialization projects. Grants are awarded to companies who are developing cutting-edge technology projects that they are developing for commercialization. This can include areas like conservation, healthcare, renewable energy, law and public safety and other innovative areas.
- Capacity Building. Service providers and consultants can often benefit from grants designed to build capacity in key areas such as governmental agencies, schools, community-based organizations, and education.
- Pilot and Demonstration Projects. Some funders support pilot projects that can demonstrate innovative ways to solve problems.
Grants allocated at the state level are usually concerned with supporting projects that will benefit the state’s economic or social concerns. They can be slightly less, as they are designed to work alongside federal grants, but can still be substantial.
These types of grants are considered more accessible because there tends to be less competition – instead of competing against applicants nationwide, you are competing with more locally defined businesses.
Because each state manages its own grant program, the types of grants on offer will vary from state to state. Each state will have its own rules, requirements, and priorities for the grants they allocate. Eligibility criteria will also be set by each state. In some instances, state grants can take the form of “matched” grants – where the grant recipient is expected to match the amount awarded.
Research is extremely important when it comes to state grants as many opportunities are not advertised nationally. The state department of commerce often has details of the grant programs they are running each year.
For example, the Washington State Department of Commerce website lists the current grant opportunities on its site, alongside eligibility criteria and other application requirements.
A further way to access public grants is to discover which grants are being offered at the city, town and county level in the area you are interested in relocating to. These grants are usually geared towards local economies and showing you can serve the community in a tangible way.
Local small business grants are very geographically specific and the kinds of opportunities available can vary widely in different locations. Much of the funding will be dependent on the individual needs of each city or other areas – so great research and scouting is required to pick up these opportunities. You can read more about grant scouting here.
One example of a local grant project is the Job Retention and Creation Program (JCRP) in New York. This program offers grants to companies who plan to relocate to Lower Manhattan in New York and create a minimum of 75 new jobs in the area within four years.
One of the biggest misconceptions about public grants is that they are a free pot of cash – a little like winning the lottery. But this is not really an accurate reflection of them.
To win a grant and to administer it properly means agreeing to a set of rules and guidelines about what you can spend the money on. Failure to adhere to these guidelines could result in your grant being canceled or having to pay back money to the funders.
There are also other hidden costs associated with applying for and receiving public grants. For example:
- It takes a significant amount of time, resources and knowledge to apply successfully for grants and to administer them.
- You need to be prepared for exposure of your company. To win grants you need to open your books to funders. They might also want to physically visit your business before the grant is awarded and during the award term to see how the money is being spent. Funders will want to see information such as financial records, employee salary information and organizational charts in order to decide whether your business is well run and a good bet to award the grant to. You may need to prepare a company audit which can cost time and money.
- For European entrepreneurs, there may be additional restrictions on which grants you are eligible to apply to – and these restrictions may not be immediately obvious until you have spent significant time and resources in research.
Despite these restrictions, grant funding can be an excellent way to add much-needed funds to your US project. You’ll get a cash-injection to help you with an area of your business, as well as recognition for winning the grant, and the chance to build ongoing networking opportunities with funders and other helpful contacts.
While it can be confusing to know where to start with applying for public for-profit funding, there are some resources that can act as a first port of call.
The Small Business Administration (SBA) is an independent agency of the federal government which aids, assists, counsels and protects the interests of small businesses. Its website has a host of information about grants and funding, as well as links to the main portal to finding federal grants – Grants.gov
Grants.gov aims to simplify the grant management process via a centralized online platform for grant seekers. There are generally more than 1000 opportunities listed from the 26 federal grantmaking agencies. They offer a searchable database, where you can add your details and check for suitable opportunities.
Don’t be fooled by the title “small business” when it comes to applying for these kinds of grant programs. The Small Business Authority (SBA) generally describes a business as small based on the number of employees for the last 12 months or the average annual receipts over three years – and their allowances are generous. Although there are exceptions depending on your industry, generally speaking, the two standards that are used to define a business as small are under 500 employees for manufacturing and mining industries and $7.5 million in receipts for most nonmanufacturing industries.
In addition to these requirements, to qualify for SBA grants your business must be:
- A for-profit of any legal structure
- Independently owned and operated
- Not nationally dominant in its field
- Be physically located and operated in the US or its territories
When it comes to international entrepreneurs the SBA does not explicitly exclude those who are expanding into the US, however, each authorizing legislation and agency policy will determine whether a foreign business can apply for the grant or not.
The SBA administers two of the largest for-profit grant sources – the Small Business Innovation Research program (SBIR) and the Small Business Technology Transfer program (STTR). These programs ensure that small, high-tech and innovative businesses remain a large part of the government’s research and development objectives.
The ultimate goal of these projects is to develop innovative technology that can be commercialized, and approximately $2 billion is awarded to US small businesses via these programs each year. They are only available to for-profit companies that are located in the US and perform their research and development in the US. In addition, these two programs have ownership requirements that state that the majority (more than 50%) of the firms’ equity must be directly owned and controlled by either:
- One or more individuals who are citizens or permanent resident aliens of the US,
- Other for-profit small business concerns, each of which is directly owned and controlled by individuals who are citizens or permanent resident aliens of the US.
To find out more and see sample proposals please visit their website.
When it comes to state and local grants, you can search online for individual locations and programs. However, this can be extremely time-consuming.
Before you get started on your search, please read our page on Grant Location Scouting to find out more, as these types of public grants can often require in-depth, local, and specialized know-how to get the best possible opportunities.
The research and application process for public funding in the US can be arduous – but with the right support, it can become an incredible source of income and development for your US expansion.
Mount Bonnell Advisors work alongside experienced public funding expert in the US who regularly support businesses to find and successfully apply for for-profit grants.
Our partner specialists are based in the US and have in-depth local knowledge to help streamline the research process and ensure you submit a top-notch application. We also offer a special US Grant Roadshow package to help connect European entrepreneurs to relevant funding bodies and develop winning grant pitches.
To discover more about the grant application process – from location scouting to making an application, and support to get grant-ready, please check out our other pages, or get in touch with one of our advisors today.
Frequently Asked Questions (FAQs) About Taxes, Company Formation, and Residency in the U.S.
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