A critical need for every new business enterprise is getting adequate start-up funding. The good news is that there are many funding options for entrepreneurs, including tech start-up grants.
Business Funding Options for Tech Start-ups
Starting a tech business enterprise can be an exciting adventure. The types of business financing that tech start-ups can utilize to bring a new idea to life include bootstrapping (or self-funding), angel investors, venture capital funding, crowdfunding, business incubators and accelerators, bank loans, lines of credit, strategic partnerships, and government tech start-up grants.
What Is a Small Business Grant?
A small business grant is business funding dispensed by government organizations or other entities. It is money that does not have to be repaid and doesn’t incur interest or high fees. Getting a small business grant is very competitive—there are reportedly around 3,000 grant proposals submitted daily. Eligibility is determined by each funding organization. The good news is that there are many granting agencies and many grants are available.
What to Know About Tech Start-up Grants
Tech start-up grants are non-dilutive, meaning that a business owner doesn’t have to give up business equity to receive the business funding. They offer the opportunity for entrepreneurs to develop their enterprises without the burden of debt. Receiving a grant can enhance a business owner’s credibility with suppliers, customers, and future investors. Many grants offer access to mentorship, networking events, and other resources. Grant programs have strict and specific eligibility requirements, and the application processes are highly competitive. The application process can be lengthy and time-consuming. Grant recipients may be required to show how the funds are used.
Sources for Tech Start-up Grants
Sources for tech start-up grants include:
- SBIR and STTR Grants. These are federal grants coming from the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
- State, regional, and local economic development grants.
- Department of Defense innovation programs like AFWERX, the Defense Innovation Unit (DIU), and other military research initiatives.
- The federal Economic Development Administration (EDA).
- University incubators.
- Small business development centers.
- The Minority Business Development Agency (MBDA).
- Innovation challenge and prize competitions.
- Philanthropic and mission-aligned foundation grants.
- Corporate start-up partnership programs.
- Corporate grants, for example, FedEx, and Visa Everywhere.
- Private foundations.
How to Get a Small Business Grant
To get tech start-up grants, follow these five steps:
First, research available grants. Due to the challenge of receiving business funding, it is wise to find more than one grant that is a good match for your business. Second, check the eligibility requirements to ensure that you are eligible for the grant before taking the time to apply. Third, assemble the required information, which may include a business plan, revenue projections, and an organization chart. Fourth, put plenty of time into the application. Make sure you address the grant’s objectives in your application. Fifth, apply early and have patience.
Seek Expert Business Financing Assistance
Contact CAB Capital, based in Mt. Pleasant, SC. We offer small businesses custom-matched financing solutions that can be faster or more flexible than other financing solutions. We have access to a vast suite of more than 150 products from a group of 67 different lenders, so we can ensure you get the funds and the terms you are looking for.