Grants for Startups and Small Businesses

GUIDE: LOANS, GRANTS AND EQUITY FUNDING > PART TEN

Grants for Startups and Small Businesses

Access to capital is a struggle for most Kansas City startups and small businesses — and a business grant may seem more attractive than traditional funding options that incur debt or force you to give up a portion of ownership in your business. 

Because who doesn’t like free money? 

Before you get too excited, let’s define what grants are, what kind of businesses they are typically for, and what you’ll have to do to land one. Grants, like any form of investment in your business, come with their own set of pros and cons. 

Let’s dig in. 

What is a small business grant?

A grant is “free” money given to a person, business (nonprofit or for-profit) or corporation from the local/state/federal government, a private or charitable foundation or a corporation. 

Grants come in many forms: federal grants, state grants, local grants, grants from private businesses or foundations, grants from winning (or placing) in business-plan or pitch competitions and even reward-based crowdfunding. There are grants for nonprofits, innovation-led companies and for all types of small business owners, including women, minorities, veterans and people with disabilities. 

However—and this is a big downer—most grants are limited to a specific audience (mostly nonprofits and tech-based startups); often require stringent qualification, application and reporting requirements; and are often only open during a limited window of time.

Typically, a grant becomes available when a government agency, nonprofit or private business chooses to set aside grant money for an area of concern. One grant may be set up to encourage people of color to pursue entrepreneurship in a community. Another could be set up to fund research and development in a specific industry or for a geographic region. 

Whatever the cause, the agency or business that opens the grant will often start by setting aside funds, determining qualifications for the grant awards and then opening an application process.

The key: Find grants you qualify for and then do the dogged and diligent work to apply for the grant.

> > > If you’d like to just talk to someone, call our Network Navigators at 816-235-6500 or tell them what you need here, and they’ll whip up your very own Personal Action Plan with your next steps and the Kansas City experts who can help.

The truth about “free government grants”

BE VERY CAREFUL of advertisements that promote “free money for your business.” These ads are misleading and often suggest you can receive a list of grant resources by paying a fee to the advertiser.

These lists typically contain a list of microloan programs that have funds you need to repay or list grants available only for nonprofit businesses.

The federal government does offer a few very competitive and targeted grants to companies developing various technologies. Read more about how to apply for SBIR/STTR grants

What are the pros and cons of small business grants?

Free money certainly sounds good but beware of the hidden costs (i.e., time) when applying for small business grants. 

Pros:

  • Grants don’t need to be repaid. That’s the No. 1 reason why grants are sought by entrepreneurs and small business owners who don’t want to give up ownership in their business or who struggle with qualifying for or repaying a traditional bank loan.  
  • If you qualify for one grant program, you will likely qualify for others. Once you’ve successfully navigated your first grant application process and grant award, you can use that experience to apply for other grant opportunities. 
  • Grants are relatively easy to find online. There are a number of free and legit resources that list available grants. We’ll drop that list below. 

Cons:

  • Grants are time-consuming. That’s why “free” is in quotes. Because they offer “free” money, many grant applications require a lot of paperwork (e.g., graphs, budget numbers, market demographics, projection sheets, detailed accounts of purpose, etc.). And many grant funders also require reporting after you’ve received the grant award.

  • Grants are not fast cash. Grants may not be available or even awarded when your startup or business needs cash the most. Grant opportunities are often open during specific and small windows of time, so you’ll need to stay on top of those opportunities and their quick deadlines. Grant approval also takes time. After you’ve applied, it often takes weeks or even months to find out if you’ve been approved for the grant funding.

  • Grant eligibility requirements can be strict. Make sure your business is eligible for the grant opportunity before you put in the time and effort to apply for a grant. Most federal small business grants are in the areas of health, science and technology. 
  • There are rules. State and federal grants are often funded with taxpayer dollars and, therefore, travel with some stringent terms. Some may require matching funds as a contingency to the grant award. Also note that grants for a small business are usually not issued to help you start a business, pay off debt or cover basic operating expenses. 

How do I get a grant for a small business?

In a word: research. 

Most grants have stringent requirements, limited application periods and stiff competition. Grant opportunities also come and go depending on grantors’ priorities and current needs. It’s also worth noting that nonprofit, tech and innovation-led companies have more grant opportunities available to them than other small businesses.

So if you’re looking for grants for your Kansas City startup or business, you’ll want to bookmark our Awards and Competitions page.

All that said, here are a few grant opportunities to keep on your radar that are consistently available to startups and businesses in Kansas City and beyond.

> > > Check our Awards and Competitions for current grant opportunities and business competitions in Kansas City.

Grants for tech startups and innovation-led companies

LaunchKC
LaunchKC is an annual grants competition that will award 10 innovative, KC startups with $50,000 in grants.

Digital Sandbox KC
Digital Sandbox KC awards up to $20,000 in proof-of-concept funding to help accelerate innovations toward commercialization. Awards are funded and announced each quarter.

Missouri Technology Corporation

Agriculture Grants (Missouri  Department of Agriculture and Small Business Authority)

Atchison County Business Improvement Grants

SBIR/STTR Grants (National)
Funded by the federal government, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants fund research and development efforts of a high risk nature that may have excellent commercial potential. SBIR/STTR Phase I awards are generally $50,000 – $250,000 for six months (SBIR) or one year (STTR).

Small U.S. businesses are eligible to participate in the SBIR/STTR program if they are for-profit and have 500 or fewer employees. Nonprofit organizations are not eligible.

>> Read more about how to apply for grants via the SBIR and STTR programs.

>> Need more support for your tech startup or innovation-led company? Download our Ecosystem Map for KC Innovation.

Other places to look for small business grants

  • KCSourceLink’s Awards and Competitions page lists current, local and regional  grant opportunities and business competitions. 
  • SBA.gov: The U.S. Small Business Administration provides a search tool that can connect you to available grants for which you might qualify.
  • Grants.gov: This federal website allows you to search for government grants. Check those eligibility requirements before you apply for any federal grant.
  • Veterans:: If you are a veteran you may benefit from special grants through the military.  
  • Agribusinesses: Explore grants and loans that support farmers, ranchers and agribusiness in Missouri and Kansas.

Get personalized help for your small business

KCSourceLink is here to connect you with the organizations and programs to help your business thrive.

The Resource Navigator® smart database is a comprehensive listing of more than 230 Kansas City organizations. Filter these resources by your geographic area or your business needs. That may be grants today, but tomorrow, it could be marketing/sales, mentoring or site development. 

You can also call a Network Navigator at 816-235-6500 or request a Personal Action Plan online. Network Navigators can’t help you apply for specific loans or grants. However, they can direct you to the right program – and the right support.

Who in Kansas City can help me get a grant for a business?

Now that you have some ideas on where to look for small business grants, let’s get you set up with the people and resources in Kansas City that can help you land a grant.

GUIDE: LOANS, GRANTS AND EQUITY FUNDING

Subscribe to our newsletter.

Get insights, inspiration and events to help you start, grow and accelerate your KC business or side hustle delivered to your inbox.

Find business help.

Connect with experts at 230+ business-building nonprofits in Kansas City.