The past year has been trying for business owners across all different industries. From having to adapt the way that daily operations are conducted, to finding new ways to reach customers and clients, we have seen businesses across all industries evolve and transform to be able to stay relevant and meet the needs of their customers and clients.
We have also seen and heard about many different types of funding that is currently available and coming available to help keep small businesses afloat during these trying times. There are two primary types of business funding: Grants and Loans.
Grants are funds that are designated or awarded to an organization for a particular purpose without an obligation to pay the funds back. Restricted grant funds are funds that must be spent on a particular project or purpose that has been pre-approved by the funder. There are typically reporting requirements and allowable expenses that have to be accounted for when using this type of funding. Unrestricted grant funds are funds that are awarded to an organization, company, or individual that can be spent for a designated purpose or to further a cause. However, there are no reporting requirements or restrictions associated with how the funds can be spent.
Grants are typically awarded either through a competitive process or by invitation. When they are competitive, the potential grantee has to submit a proposal for funding that is then scored according to the priorities of the grantor. They then choose the organization whose proposal most closely matches their funding priorities and goals associated with the funds. Invitation-only grants are offered to organizations that have been identified as potentially being able to carry out the mission for the funding. In some cases, a letter of inquiry can be submitted by interested parties who are then selected for the invitation process.
There has also been a surge in available funding for businesses in the form of loans as well. The government has reallocated funds to help support small business during the pandemic. Funding is available for business owners at the federal, state, and sometimes even the local level. There are both forgivable and traditional loans. The forgivable loans do not need to be paid back as long as certain criteria are met, and the borrower used the funds only for the predefined allowable expenses.
There are many different options for funding to help struggling small businesses as well as to help start-up businesses. Follow us for more information.
