California is home to 35.5% more small businesses than Texas. They are responsible for creating two-thirds of new jobs and employ almost half of all private sector employees. No wonder, they are the key drivers of economic growth.
In fact, according to the Small Business Profile (2022) by the US SBA, California is home to 4.2 million small businesses. These businesses employ 7.2 million workers in the state.
But, a recent survey found that more than 44% of small businesses are at risk of shutting down, due to the COVID-19 pandemic. To ensure their sustenance, and help them pivot and adapt to changing times, business grants are offered.
Grants are financial assistance offered to help businesses innovate and incentivize pursuing ambitious business opportunities. Through this article, we intend to help small business owners located in California avail of grants.
Here’s a quick look into what we’ll learn:
Various Small Business Grants in California
Grants for Small Business Owners
1. National Association for the Self-Employed (NASE) Growth Grants
If you are a small business owner, you can apply for a business development grant from NASE worth up to $4,000. Since 2006, NASE has awarded nearly $1,000,000 through its Growth Grants program. The grants can be used for marketing, advertising, business expansion, and other operational needs.
One of the important eligibility criteria is to become a member of the NASE organization.
2. Nav’s Small Business Grant
Nav, a business financing platform for small businesses, awards $10,000 as grants, every quarter. And $5,000, to the runner-up. Their goal is to support small business owners.
Their selection process is simple. Business owners post about their business. They then describe how they plan to use the grant. The post with the most votes is awarded the funds.
3. California’s Paid Family Leave Program
This program allows California workers to take paid leave, regardless of business size. The leave could be for – a new child, or care for an ill family member.
Often businesses are impacted by staff absence. They have to undergo increased costs – training, and upskilling existing staff. The business also requires new staff to be hired and trained. This helps them maintain business productivity. The Paid Leave program helps them manage such expenses. Businesses can avail of up to $2,000 per employee.
Grants for Women
Amber Grants For Women
California leads all states in the USA in startups by women. So, if you’re a woman, or know someone who needs help, this grant will help you.
The Amber grant is offered by WomensNet Foundation on a monthly and annual basis. $10,000 is granted monthly to women-owned businesses niches – Health and Fitness, Food & Beverage, Mental & Emotional support, Education & Child Care, etc. They even offer grants to non-profit organizations. Businesses located both in the US and Canada are eligible.
Grants for Minorities
1. SoGal Black Founder Startup Grant
Black women founders are the fastest-growing community of entrepreneurs. They have a legacy of reinvesting in their communities and creating intergenerational wealth. But unfortunately, less than 0.5% of black women entrepreneurs receive venture capital funding. And, this grant aims to change that. The SoGal foundation with other sponsors is funding $10,000 and $5,000 cash grants. They even support non-binary entrepreneurs.
2. Support Latino Business Impact Fund (SLB Impact Fund)
Support Latino Business celebrates the significant contribution and economic impact created by the Latino community. As a token of support, they grant a total of $10,000 through their SLB Impact Fund. To be eligible, a business must have at least one Latino founder. And the founder must have at least 50% ownership. The business must be running operations for at least one year.
3. Comcast RISE
Startup business owners can avail of two types of grants by Comcast RISE. The first is marketing services along with technology makeovers and the second, is a $10,000 grant.
These grants are offered quarterly to startups that have been operational for more than a year.
Another important criterion – a 51% business stake needs to be owned by a woman or person of color.
Grants for Nonprofits
California Nonprofit Performing Arts Grant
To encourage workforce development, the California Nonprofit Performing Arts grants non-profit organizations. The nonprofit performing art organizations are awarded $49,500,000. To be eligible, the annual gross revenue is used as a qualifier. The grants can be utilized for – employee expenses (healthcare benefits, insurance premiums), payroll, training, and equipment.
Grants for COVID-19 Impact
1. California Microbusiness COVID-19 Relief Grant Program
The California Office of the Small Business Advocate (CalOSBA) provides $2,500 as a grant. Only micro businesses impacted by COVID-19 are eligible. This grant is implemented by county organizations or non-profits working on their behalf.
2. California Small Business COVID-19 Relief Grant Program (CA Relief Grant)
The CA Relief Grant was allocated $4 Billion in 2020. Grants between $5,000 – $25,000 are awarded to small businesses and nonprofits in California.
Grants by Corporates
1. Manifest Grant Program by Alibaba
Alibaba, one of the world’s largest B2B e-commerce marketplaces, committed $750,000 in 2022. The amount is available, as grants, for – small and medium-sized businesses in the USA. Alibaba aims to enhance the competitive edge of its products. Last year, the amount was $500,000 and was granted to 50 small businesses.
2. FedEx Entrepreneur Fund
FedEx in partnership with Hello Alice has launched the FedEx Entrepreneur Fund. The fund aims to distribute $300,000 in grants and educational resources. Their only aim – entrepreneurs in the United States to gain access to funding, resources, and networks.
The best part? It is awarded to veterans and/or entrepreneurs with disabilities.
3. Walmart Local Community Grants
Walmart provides non-profit local communities, with grants in the range of $250 to $5000. The funds can be utilized by organizations whose goals are either: economic development, diversity and inclusion, education, environmental sustainability, health and human service, hunger, public safety, or quality of life.
Local County Grants
1. California Dream Fund
The program is administered by the California Office of the Small Business Advocate (CalOSBA). It is a one-time $35 million grant program. It aims to seed entrepreneurship and small businesses in the state of California. Entrepreneurs and small business owners will be provided intensive training through the Technical Assistance Expansion Program (TAEP). Once the training is over, business capital funding of up to $10,000 is awarded.
2. San Francisco Women’s Entrepreneurship Fund
If you are a for-profit business and are women-led, this grant is the right for you.
You can get a mini-grant of up to $2,000, especially if your business is affected by COVID-19.
Other eligibility includes – having up to 5 employees, and less than $2.5 million in gross annual receipts in 2018 or 2019.
3. Riverside’s Microbusiness COVID-19 Relief Grant Program
Micro Businesses negatively affected by the COVID-19 pandemic can apply for a $2,500 grant. This grant is sponsored by the Riverside County Office of Economic Development. Its main aim is to reach entrepreneurs and micro businesses throughout Riverside county. So, if you are a business owner located in Riverside, this grant is for you. A few criteria include – having less than 5 employees, and less than $50,000 in revenue in 2019.
4. Kern County’s Micro Business Relief Grant
Eligibility criteria include – physical presence in Kern county, being operational before December 2019, and having less than $50,000 in revenues in 2019. Grants up to $2,500 are awarded to eligible businesses.
Where to Find New Small Business Grants?
Grants.gov is a comprehensive resource of available government business grants. Such grants are allocated by various federal agencies. This not only helps them support a wide range of businesses such as restaurants, home improvement, and dental clinics but also helps foster economic growth.
Backed by the U.S. Small Business Administration (U.S SBA), Score.org provides business assistance to business owners. A learning library, resource center, and experienced mentorship are provided. Mentors provide customized based advice based on your grant application.
3. Small Business Development Centers (SBDC)
SBDC, too, is backed by the U.S SBA. The SBDC centers help you apply for various grants and provide business assistance. They act as your best alternative to private consultancy, without being expensive. They help with – marketing, engineering, production, etc.
4. California Grantwatch
This website helps nonprofits and small business owners stay up-to-date about the latest available grants. You can filter grants based on your location and interest.
How To Find The Best Suited Grant For Your Business?
Now that we understand the various grants for helping small businesses grow, let’s discuss in detail, the grant application process.
Understand Your Business Eligibility
According to a report by the Californian government, 4.2 million small businesses are operating in the state of California. This makes securing grants highly competitive. As a business owner, you can save your time and effort by studying and checking if you meet the various eligibility criteria for the available grants. This can also help you leverage business opportunities. For example, if you, your spouse, or your business partner belongs to a minority community, you become eligible for grants that cater specifically to these communities.
Check If Your Business Is A Right Fit For Grants
Few criteria that business owners must be aware of and have documents to support their claims:
- A number of years the business has been operational?
- Revenue growth attained in each financial year
- Tax returns for each financial year
- Assessment test results such as FICO (Credit scores)
- Previous grants applied and accepted/rejected?
- Number of employees
- Percentage of the business stake owned by BIPOC or minority community member
- Type of organization – for-profit or non-profit
Alternatives To Grants
If you find yourself ineligible for a particular grant or find the process of applying for a grant cumbersome, you can explore other financing alternatives or borrowing options such as loan programs, credit cards, or crowdfunding.
Let’s understand them.
Small Business Commercial Loans
You can choose the right financing needed by comparing options such as – bank loans, SBA loans, business lines of credit, equipment loans, and term loans. Loans are hassle-free and easy to obtain but require business owners to keep collateral.
Small Business Micro-loans
If commercial loans do not interest you, consider exploring micro-loans. Microloans are small loans that are less than $50,000, have short terms, and have low-interest rates.
Small Business Credit Cards
Do you want to undertake business purchases while earning rewards? Credit cards are the right option for you then. Explore a host of credit cards that meets your needs.
Crowdfunding for Small Businesses
Online platforms such as Kickstarter help businesses leverage the power of the internet and fund their ideas. Individuals can support businesses they love.
How do Grants Impact Your Business?
Still unsure if availing of grants is the way to go? Let’s dive deeper.
Easy Access To Capital
If you are a small business owner looking to expand your business or hire specialists in your existing team, grants can help you achieve those objectives quickly. Grants act as complimentary money without the pressure to repay.
If your small business has qualified for a grant and has generated a positive return on the investment, it becomes easy to secure successive grants. This happens because investors get to see a positive outcome in the process.
Helps Gain Credibility
If you have been awarded a grant, it helps you gain visibility for your work easily. This helps you promote your business idea and get your business noticed.
Explore Untapped Opportunities
Certain grants ensure that the small business spends on particular activities such as hiring consultants and examining their environmental impact. This helps businesses explore untapped opportunities which in return could prove to be beneficial for the firm.
Since there are more than 4.1 million small businesses in California, securing a grant becomes competitive. The best way is to be on the constant lookout for available grants before they close their applications.
The grant application is a tedious and cumbersome process. A lot of process needs to be taken care of before the aid is availed. Research, paperwork, finding the right fit for your business and a convincing proposal needs to be drafted to qualify.
One of the major drawbacks of grants is that they might not be renewed. This can be scary since business owners need to undertake decisions based on the grants available, which may not be in the best interest of the firm. Entrepreneurs would have to reapply to avail of grants once the funds are exhausted. The best possible solution is to keep track of your funds and monitor financial forecasts using business solutions such as – Upmetrics.
Although grants help scale your business operations, there are restrictions and conditions attached. Businesses can invest the grant only for specific activities. Therefore, business owners should be clear about the purpose of grant usage.
Applying for a grant is the first step in the process to fund your business idea. Although it is a competitive and ongoing process, it helps you get access to resources. This article was a sincere effort to help you secure the much-needed business grant.
Before availing of a grant, the business owner must be clear about the purpose and how they would utilize the funds. This helps them stick to their overall goals better and generate a positive effect for their business.
In our experience, we have seen having a detailed business plan improves the chances of business success.
Business planning software like Upmetrics helps business owners, like you, plan their business meticulously up to 2x faster. What’s more? You can even manage your cash flow, even if you have no technical or management background. It’s that easy and simple.
You can even schedule a free demo today, and shape your business ideas into reality.