Grant Programs Help SMBs Address Cashflow Issues

by Granville Triumph

Rising inflation, falling revenues, labor shortages and supply chain bottlenecks have disproportionately affected small to midsized businesses over the past two years. Approximately 20 percent of SMBs worldwide found have gone out of business since 2020, with women- and minority-owned businesses being particularly hard hit, according to a new study from Meta.

Cash flow issues created by the ongoing economic downturn threaten the survival of many SMBs, stripping them of critical working capital and limiting their ability to expand and innovate. According to a U.S. Bank study, 82 percent of SMB failures are linked to cashflow problems.

SMBs often look to lending institutions for funding, but there are other options besides taking on additional debt. Federal agencies, as well as numerous private-sector organizations, offer cash grant programs that provide SMBs with critical funds that don’t have to be paid back.

Here are a few of the programs that can provide important lifelines for struggling businesses:

  • The American Rescue Plan Act. Cities and counties across the country have been awarded millions of dollars through ARPA, the federal Covid stimulus package. These government agencies make a good chunk of these funds available to local businesses through grant programs. You can search grant programs and submit applications at Grants.gov.
  • Minority Business Development Agency. Operated by the U.S. Department of Commerce, the MBDA provides grants and loans for minority-owned businesses seeking to penetrate new markets. The MBDA offers this short video with tips for applying for a grant.
  • The U.S. Economic Development Administration. Also operated by the Commerce Department, the EDA provides grants and technical assistance to businesses in economically distressed areas. EDA investment programs are intended to help businesses retain existing jobs and stimulate growth. 
  • State Trade Expansion Program. Run by the U.S. Small Business Administration (SBA), STEP provides grants to assist small businesses looking to export products to foreign markets. Grants are distributed by various state entities. You can find a full directory of state agencies offering STEP funding here.
  • Small Business Innovation Research Program. Also coordinated by the SBA, the SBIR program offers grants to small companies engaged in technology research and innovation. Qualified projects must have the potential for commercialization and must meet other specific agency requirements. Learn more about the application requirements here.
  • National Association for the Self-Employed. The NASE offers $4,000 Growth Grants for entrepreneurs to grow their businesses. Four grants are awarded each quarter, and funds can be used for marketing, advertising, hiring employees, expanding facilities and other specific business needs. To apply, you must register for an NASE account here.
  • Comcast RISE: This program provides $10,000 grants to women- and minority-owned small businesses. The program also provides separate grants for consulting services, marketing programs and technology upgrades. You can find more information and application forms here
  • Local Initiatives Support Corporation. The nonprofit organization works with numerous corporate sponsors to provide grants and loans to qualified small businesses. During the pandemic, LISC has distributed $240 million in emergency cash grants to thousands of small businesses. Go here for additional information or to apply for a grant.
  • The Barstool Fund. Operated by Barstool Sports, the fund offers grants of up to $100,000 to small businesses, with a special emphasis on businesses that kept most of their employees on the payroll during the pandemic. Apply here.

Taking on more debt to increase cashflow may not always be in a small business’s best interest. Direct grants that don’t have to be paid back are an excellent source of working capital for organizations that qualify. There are dozens of other grant programs that might suit your operation’s particular needs. You shouldn’t hesitate to apply for any that can help you sustain your business.

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