You Can Access Government Grants, You Just Have To Understand The Game

Government grants, or any grants for that matter, are probably one of the most sought after resource by business owners.

Grants are essentially free business capital (money that does not have to be paid back) and, if acquired, can go along way in providing needed resources to help businesses with immediate cash flow issues or to attract and win new business.

But, these grants, especially government grants, are extremely hard to get unless your business is tax exempt or a non-profit organization.

You hear this from nearly every expert or official on the planet - from Business.gov to SCORE and even from the Small Business Administration (SBA). They constantly state that there are no grants programs (government or otherwise) for 'for-profit' businesses - the government (federal, state or local) does not provide grants directly to businesses to either start-up or cover operating expenses.

And, for the most part this is very true. The government (any government entity) does not usually provide grant funds directly to businesses. But, businesses can access these funds in an indirect manner as most grant funding is allocated to government entities and departments (federal, state and local) for distribution within their local areas.

Take an example from the federal transportation grants as part of the recent stimulus package. Let's say your city wants to purchase new buses for public transportation. Your city can apply for these stimulus grants to get the funding to purchase the new buses. The federal government agrees with your city and prepares to send the funding but stipulates that any purchase with these funds have to comply with the new emission standards - meaning the buses have to be green.

Now, when your city receives the grant funds, it has to go to a non-government company to purchase the buses as no government entity manufactures buses. Your city officials will request bids from local and national transportation manufacturers outlining the emission standards that need to be met as well as their process for accepting bids.

If your company can meet those standards and win the bid, your company will essentially indirectly access those federal grant funds.

Keep in mind that your city, county, state or even federal government departments use grant funds to make all types of purchases from durables goods like buses, computers and office furniture to services like building construction, road maintenance and in-house child care; just to name a few. In fact, these government entities make all types of purchases from for-profit, non-governmental business organizations to include landscaping, window washing and even commercial cleaning - again, just to name a very few.

To find out what type of programs your local and state governments are requesting bids for, simply call your mayor's office, county administration offices, state governor's office or visit your local chamber of commerce and ask about their community development grant or other grant programs. All of these groups can point you to the right information for your local or state area. For federal opportunities, simply visit Grants.gov or look into Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) grant programs at SBIR.gov.

I have seen numerous businesses actually start new companies just to bid on and fulfill these grants request. Think about it. Your local government is struggling to revitalize your local downtown area and has solicited a grant to redesign the entire area in hopes of bring in more businesses as well as more of the spending public. For this redesign your city officials are requesting bids for all types of services from urban planning and architecture to actual construction and landscaping for both buildings and parking area.

Now, let's say that you are thinking about entering the green business industry and want to create a company around this new idea. You quickly form a company and submit a bid to the city to design and build new green area within the downtown area to include the top of all government offices. If you win the bid for this, you have then indirectly accessed government or federal grant money.

Also, think about the bus example previously mentioned. If your business is in the bus manufacturing or sales business, when the federal government announced the creation of the stimulus program to include transportation needs, your business could have easily went to your local government offices and sold them your products - outlining the benefits of your offerings. Thus, even if your city was not in the market for new buses, they might have submitted a request for these grants funds based solely on your efforts of bring the benefits of your company to their attention. Thus, your city gets new buses (more environmentally friendly buses) and your company increases its business through federal grant funds - a win/win situation for everyone involved.

Moreover, if any of these entities are not requesting the products or services your business currently offer or for a new product and service you want to offer or form a company around that does not have to stop you either. You can always approach these government entities (federal, state and local) and submit a white paper outlining how your offerings can and will benefit the government entity and the population at large or in your community. If they agree (usually based on how well you sell it) they will pursue federal or state grants to purchase your products or services. Here again, your business, either new or established, has now accessed government grant funding - be it indirectly. Most local and state government agencies hire in-house grant writers to write grant requests on the entities' behalf or bid on these grant funds.

Lastly, keep in mind that these federal or state grants are not open grant funds to help you just start any business you want or to cover your operating costs or losses - the entities that distribute these funds must receive something in return - either some product or service they need or products or services that will benefit your community at large.

Just because you or your business may not be able to directly obtain federal or state grants it does not mean it cannot be done. You just have to understand the rules and workings of these grants as well as be willing to go out and either win these bids or sell yourself and your business to these entities - educating them on how your company can help them and your communities.

One final thought. If you do plan to write grant requests for the SBIR and STTR programs, it may be in your best interest to hire or contract a professional grant writer that has experience with these programs. Not only will it save you a ton of time but will significantly improve your chances of winning the bid on your first try.

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