How to prepare your business for grants in the US
Steve Maithya
Introduction to the US marketplace and grants
Market analysts deem the US marketplace as one of the most competitive places to run a business. According to data released by the U.S Census Bureau last year, the country hosts about 7.4 million small businesses. This is about 2.27 businesses per 100 residents and contributes to about 40% of the private sector workers in the U.S employment sector. Starting or running your startup under this cloud of businesses could pose stiff competition on your startup. However, despite the pressure of rivalry, the business arena also takes credit as a safe-haven platform to develop your firm as it’s exposed to mainstream benefits.
Business grants are among the array of benefits offered to businesses in the US. The country’s regime in tandem with several private sectors injects free capital to the qualifying business firms. A firm applies for the money citing to finance a project or an idea and receives the funds after the funding body has viewed the application and approved it. However, the gifted businesses should use the money as indicated or risk paying back or incurring more fees.
Creative entrepreneurs gamble for these funds to boost their startups’ projects and mitigate the intensity of the competition. Basically, grants are free funds offered by the U.S government and other private funding institutions. However, applying for these funds depends on several key factors. So, how should you prepare your business for grants?
Incorporate your business into an entity
Grant insurers like dealing with legitimate business firms. They want to know the location of your business, number of employers, its value, and its unique employer federal identification number, among other KYC-related details. However, it doesn’t have to be as big or legit as Microsoft Inc. and its counterparts but must have at least a unique employer federal ID number.
A business’ employer federal ID number gives traction that the firm operates as an entity. Meaning it abides by laws hovering above the business field. Hence, putting it into the limelight to qualify for grants. As an entrepreneur looking forward to benefiting from grants in the US, make sure your business is well registered and holds a unique employer federal ID.
Pay all Business and Personal taxes
Your business tax payment history should also be clean. Most grant issuers dive into a business’ tax payment data in the process of releasing grants. Others will also check the business’ owners’ tax payment statuses. If the firm has some tax defaulting issues or its leaders have failed to pay tax before, it might lose the grant issuing opportunity. Businesses with a good tax payment track history easily qualify for grants. As an entrepreneur, always file your personal and business taxes as it places the business in the frontline for grants.
Always update your business books
Updating your business books makes it easy for grant issuers to deduce important business information, like its trend. If the records show that your business revenue was 10% lower last quarter compared to the current quarter, and the ongoing external market conditions hold, the grant issuers can predict an increase in revenue ahead of the next quarter. Also, it creates a focused imprint on your business convincing grant issuers the funds will be well used. And sheds light on your business as the best fit to receive grants. Hence, updating your business books is a fundamental way of preparing the entity for grants.
Segregate your business capital from your personal expenses
Mixing your business capital with personal funds could easily shut it down. Every business depends on a certain amount of funds called operating capital for effective processes. Keeping your personal funds prevents you from knowing the monetary size of the operating capital. You won’t tell when the personal fund’s lot runs dry rather extend the expenses to the business capital.
In the long run, a bunch of business bucks will have been used subjecting the business to capital problems. It’s essential to have a separate business account to hold your business funds. Grant issuers will definitely enquire about this before disbursing grants. Some will even suggest you create a separate account for receiving the grant money. Therefore, separating your business funds is essential when preparing it for grants.
Bottom line
If a business meets the criteria of receiving grants, the owner should file for a grant application. The application is essentially a smart business plan of the idea or project you want to finance. You should give detailed information about the project and how you will use the grant. After application, it’s good to keep in touch with your grant provider. For starters, you can call to enquire about your application status. Grants can be applied to local government grant providers near you, state grants issuers, and federal grant funders like the US SBA.Gov.