Funding is always a challenge for small and growing businesses. There are a number of government grants and other forms of support for small businesses that can help you expand. Most of these programs are specific to the type of business and the business’s goals for expansion. Some of them are also directed toward specific demographic groups. This is certainly not a comprehensive list of government funding opportunities for small businesses, but it will provide an overview of the type of funding that might be available.
Small Business Administration Programs
The U.S. Small Business Administration (SBA) is a go-to resource for many small business owners. The SBA offers several different ways to get funding, though most are loans rather than grants.
Small Business Innovation Research (SBIR)
This is a competitive program that gives small businesses grant funding to participate in federal research projects with commercial potential. If your business deals with research and innovation, this could be a good way to expand that function. To qualify, businesses need to be based in the U.S., for profit, run by a U.S. citizen or permanent resident, and have fewer than 500 employees.
Small Business Technology Transfer (STTR)
STTR is similar to SBIR, with the major difference being that businesses participating in STTR will need to partner with a nonprofit research organization. This can be a college or university, private research nonprofit, or a federally funded research center. The program’s goal is to strengthen the connection between basic scientific research and businesses that can take advantage of research products’ innovations.
State Trade Expansion Program (STEP)
If you want to expand your business by exporting your product, STEP can help provide access to foreign markets. Businesses can also receive support for developing international marketing campaigns and access to foreign trade shows. This is a federal program that uses state agencies to distribute funding, so you’ll work with the Economic Development Partnership of North Carolina to apply for STEP.
Small Business Investment Company (SBIC) Funding
SBICs are private investors licensed by the SBA. The SBA matches the private investment 2:1, and this money can be given as a loan, equity in the company or a combination of the two. SBIC funding can range from $250,000 to $10 million. To qualify, businesses need to be U.S.-based, meet the SBA’s size standards to qualify as a small business, and be part of certain approved industries.
SBA-guaranteed loans usually come with lower interest rates and lower down payments than private business loans. They can range from $500 to $5.5 million depending on the size, nature and needs of your business.
Department of Commerce Programs
The federal Department of Commerce is another good source for business funding. These grants tend to be more specific, so you’ll want to be sure you qualify before applying.
Minority Business Development Agency (MBDA)
The Minority Business Development Agency offers specific grants and loans for minority-owned businesses. These will vary, so you’ll need to watch the agency’s website for opportunities that apply to you and your business. This is another federal program that operates through state agencies, so you’ll want to get in touch with the North Carolina MBDA Business Center.
Economic Development Administration (EDA)
This agency provides competitive grants to either specific demographic groups, regions of the country, or industries. These will vary based on the needs the agency sees throughout the year. Recent examples include indigenous communities and travel and tourism businesses. Businesses can apply for these grants through grants.gov.
U.S. Department of Agriculture Programs
The USDA offers several funding programs both for businesses directly involved in agriculture and those operating in rural areas.
Farmers Market Promotion Program (FMPP)
Farmers Market Promotion Program grants support farmers’ markets and similar arrangements that support direct producer to consumer sales, with the additional goal of improving consumer access to locally farmed products. Agricultural businesses, as well as related trade groups and nonprofits, can apply for these grants.
Rural Innovation Stronger Economy (RISE)
The RISE program is designed to create high-paying jobs and promote business growth in low-income rural areas. While for-profit businesses are not eligible to apply for these grants, they do support building and growing businesses in rural areas.
North Carolina State Programs
In addition to federal programs, North Carolina offers funding opportunities for small businesses as well, mostly run through the state Commerce Department. These include cash grants and tax exemptions that can improve your cash flow.
A factor you’ll see mentioned in many North Carolina state programs is the County Distress Rankings system. This system sorts the state’s counties into three tiers based on their economic well-being, with Tier 1 being the best off and Tier 3 being the most economically strained. This calculation is based on the counties’ average unemployment rate, median household income, property taxes and population growth. Businesses will receive the most credit for investing in Tier 3 counties.
Job Development Investment Grant (JDIG)
The JDIG program provides cash grants to companies that invest and create jobs in North Carolina. The grants are awarded based on the number of jobs created, the wage those jobs pay, the county’s economic tier and the industry the business is in. They are paid annually for up to 12 years.
One North Carolina Fund (OneNC)
This is another cash grant program that is designed to allow the governor, through the North Carolina Department of Commerce, to support job creation quickly. To calculate grant amounts, the department considers the number of jobs a business creates, the location, the economic impact, the overall importance to the state and the level of investment in the state.
Business Tax Exemptions
North Carolina offers a few different ways for businesses to reduce their tax burdens. For example, manufacturing machinery and raw materials are exempt from sales tax. There are several other goods and services that are exempt from state sales and use taxes, detailed here.
Start Your Business Off Right With Our Business Startup Team
Applying for government grants can be complicated, but many agencies offer online resources like webinars and application guides to make it easier. Federal grants are usually processed through grants.gov.
Starting a business, applying for grants, and serving clients all at the same time can be a daunting task. Make sure you’re building your business the right way with the business law team at Wilson Ratledge by your side. Call us today at 919-787-7711 or fill out our online form to schedule a consultation!