A grant is free money or capital. Capital is required for business growth and grants are means of getting capital. Grants typically serve as a boost to any business because most of the time the money is not to be returned. It helps you cover costs and expenses in your business and boosts your new business or expands your existing business.
As grants are not given to all businesses, there must therefore be a business posture a business must show to be a beneficiary. In this write-up, we would be considering what grants are and its benefits, its benefits to businesses, the documents required, and how to obtain a grant for your business.
What are grants?
A grant is an award, usually financial, given by one entity (typically a company, foundation, or government) to an individual or a company to facilitate a goal or incentivize performance. Grants are essentially gifts that do not have to be paid back. Under most conditions, business grants are offered by various organizations or bodies based on a class of goals. It could be granted to entrepreneurs in Agriculture or technology. The rewarding part of grants is that they do not demand a payback.
In simpler terms, it is free money.
Are grants beneficial to businesses?
Yes, it is very beneficial and this is because there are lots of innovations and businesses with little or no funding to boost its capabilities. Like the men of old will say “It is what is in your hands that thrives”. The following are the benefits of grants to your business:
Grants are free and not to be paid back. Hence, you are free from interests and repayments. This enables a business owner to put the money to good use to ensure profitability.
They are easy to access as all you need is a substantial working business, its workings, and a plan.
Grants are testaments, they bear each other because once you get a grant and the money received is put to good use, other institutions see and they become willing to support.
Brand visibility; when you receive a grant, most institutions will publish it and this puts the business in a good light as it would be seen as credible.
Source of encouragement: It is a push for the business owner as it shows that the business is doing something right. This fuels a lot of strategies and plans in motion for the business.
It should be known that grants are one of the most attractive sources of capital for any business because it helps in reaching your goals and objectives.
What to do to get a business grant
Eligibility requirements for grants vary based on the type of grant you’re applying for. It is usually based on different factors ranging from your goals, objectives, and specific industry the business operates in, also if it fits its definition of the type of business model and if it meets a minimum annual revenue threshold.
Soliciting grants to fund your business might be your best bet at scaling, and this is because the grants received are used to promote and grow the business to its desired level without the need to pay back. With this, you reduce loans that may slow down the growth of the business. Every business with viable progression should therefore see grants as a means to an end.
How business grants can be gotten
Research on grants
Nothing is free even in Freetown. To get free money you must work for it. Although grants are considered free money, an organization or individual typically has to spend a lot of time and effort researching available grants and writing grant proposals. We are in an age where we have access to a lot of information using the internet and other media to look for relevant grant opportunities. Look for available grants from government agencies, or foundations that target issues aligning with your business such as poverty, education, health, agriculture, and environment, among others.
Bear in mind that each grant has its peculiarity, so you should take note of the pre and post-requirements, eligibility criteria, and application processes.
Have a compelling business plan and goal
After researching and finding a suitable grant that your business falls under, then you tailor your business plans and goals towards the issues the grants targets. Outline the long and short-term business goals, the timeline, the strategies you will employ in achieving these goals as well as the resources needed to achieve the goals. This further pushes the narrative of your business venture to the grantors.
Upon checking the requirements, attach necessary documents such as proof of ownership, financial statements, and letters of support if need be. The financial statement to be submitted can be pulled from the Tyms Bookkeeping app. The app typically allows you to connect different banks and pull statements from them. You can also get your cash flow statements, and profit and loss statements for various financial years as may be required by the grantor.
Have a record of your financials
Grantors don't give grants based on discretion only. They can also infer from financial records, the standing of the company, its viability, valuations as well as its growth possibilities. Every organization or institution asks for business proposals and conducts necessary due diligence regarding any business it chooses to give a grant. This is done to ensure that the grant is not wasted. The grantor looks closely into numbers and sees if it would be beneficial to the business especially if there is a visible growth or revenue trend.
As said above, you have to back your application with numbers. There must be a record of your financials showing the standing of the business as it relates to how beneficial the grant will be in scaling and meeting its objectives. Tyms Book helps in achieving this by enabling the business owner to have standard books and records of transactions of the business from inception till date.
Apply for more grants
Once you receive your first grant, you significantly boost your chances of receiving additional funding in the future. The way you use the funding to build your business and achieve your goals will also serve as an eye-opener to other organizations willing to support you. So, when applying for grants, state that you have been a beneficiary of another donor. This helps in standing a chance of earning the grantor’s trust.
Documents required for grants
These and more are some of the documents and information you may need when applying:
Your name, Personal story, Business plan, Business pitch, Annual revenue, Bank statements, Years in business, Purpose of funds, Number of employees, Website name, and other information required.
Grants available for businesses in Africa
Different institutions have come up with supportive grants to support companies and businesses, some of them are:
Tony Elumelu Entrepreneurship Programme (TEEP)
The Tony Elumelu Entrepreneurship Programme is launched every year and it is aimed at providing 10,000 USD seed funding for entrepreneurs across Africa.
Yearly, the program selects 1,000 entrepreneurs from several applications made across Africa. Successful applicants are reviewed by experts in the industry and winners are selected based on various market and financial metrics.
To be eligible:
Business must be based in Africa
Business must be for profit
Business must be 0-3 years old
Applicants must be at least 18 and a legal resident or citizen of an African country.
It majorly gives financial support to businesses across Africa and the middle east. It is famous for supporting small-growing businesses (SGBs) as well as small and medium businesses (MSMEs). GroFin has a fund size of US $100+ Million to fund Nigerian micro, small and medium business (MSMEs) across the country.
To be eligible:
Business operations must be in the following countries: Nigeria, Ghana, Zambia, Egypt, South Africa, Kenya, Tanzania, Rwanda, and Uganda.
Your business must be for profit.
Your business must have a turnover of less than US$ 15 million and assets less than US$ 6 million.
You require financing between US$ 100,000 and US$ 1.5 million.
The business is owner-operated and/or the owner is substantially involved in running the business.
AYEEN Financial Grants
In empowering young African entrepreneurs, AYEEN is committed to empowering and creating platforms that facilitate intra-trade on the continent. AYEEN looks to finance small businesses in various sectors of the economy. During the grant period, the business owner will be monitored for one year. The only criteria for the program is that the applicant must be a Nigerian and the business must be located in any of the 36 states of the country.
ShEquity Business Accelerator Program
This program provides venture-building and technical support to African female entrepreneurs across the ECOWAS region who are looking to grow their businesses. It focuses on innovative and scalable businesses in agribusiness, climate-smart businesses and fast-moving consumer goods(FMCGs), healthcare, logistics, and tech-enabled businesses. The seed investment ranges from US$50K- 4250K.
Lagos State Government CARES Grant Program For Entrepreneurs
It is a state-level intervention funding that provides up to 1 million naira to young entrepreneurs involved with micro, small, or medium-sized businesses focused on agriculture and social protection.
Wema Bank Hackathon Program for Nigerian Entrepreneurs.
This grant is given to professionals to build and scale solutions. It also gives the privilege to learn from renowned industry experts while getting visibility for your team and solution.
Others include the Bank of Industry (BOI) Entrepreneurship Programme for Young Nigerians, Orange Corners Incubation Programme for Nigerian Entrepreneurs, Leap Africa Social Innovators Programme and Awards for Young Nigerian Entrepreneurs, and a host of other grants. For these grants, a business owner must show significant financial standing and workings of a thriving business and Tyms Bookkeeping helps you in having an up-to-date record of your business’s financials.
What next after getting a grant?
After getting a grant, there may be some specific instructions to be followed and failure to adhere to some rules may result in repaying some or all of the money received. The guidelines are in place to ensure the use of the grant for the said purpose.
With this, the business owner is implored to maximize the grant for the development of the business and to explore business potential, and increase working capital for more efficient business operations. To better track expenses and money received, the business owner can make use of the Tyms Book by recording inflow and tracking inventory. This way funds are accounted for and the business owner can make better decisions.
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