“The secret of getting ahead is getting started” –Mark Twain
But whenever we think of getting ahead by starting our own business, automatically the question of funding comes to our mind!
What if you get free money for your new business venture! Now, you might be thinking that is it really possible?
Yes, it’s possible! In fact, we have listed some of the best possible ways to start your business with free money.
- Look for angel investors!
Well, it might happen that the banks are not encashing enough money for your assets! And you don’t have any other option like a financially well-off relative or a friend!
In that case, you can take the help of some well-off individuals who invest in startups in exchange for equity stakes!
Usually, we call these individuals as angel investors after the term was first used by William Wetzel, founder of the Center for Venture Research, University of New Hampshire.
Some of these angel investors not only offer to finance, but also guide you for your business based on their industry experience!
But how will you find these angels?
You can approach the following groups to contact angel investors for funding your business like:
- Hyde Park Angels
- Tech Coast Angels
- Band of Angels
- Golden Seeds LLC
- Investors’ Circle
You can make an appointment with an angel investor by calling at their offices and presenting your business idea!
But try to make a strong impression with your business idea to grab the angel investor’s attention!
- Small Business Innovation Research Program (SBIR)
Basically, the aim of SBIR is motivating technological innovation along with scientific entrepreneurship. So, if your business is associated with research and development but with commercial potential, you can apply for the SBIR!
You can get grants starting from $150,000, and if your business plan is impressive enough, you can get an additional $1 million too!
In SBIR, 11 government agencies participate by setting up their own eligibility criteria. Usually, these agencies set the research and development topics and review the applications!
- Small Business Technology Transfer Program (STTR)
STTR is somehow similar to SBIR except for one thing! You can apply for STTR if you want to collaborate with a research institution. Make sure that your business meets the following eligibility criteria:
- American-owned and independently operated
- For-profit company
- Principal researcher need not be employed by small business
- Company size limited to 500 employees (No size limit for nonprofit research institution)
The grants usually start from $150,000 and can go up to $1 million! The following 5 federal agencies reserve a part of their research and development funds for STTR.
- Department of Defense
- Department of Energy
- Department of Health and Human Services
- National Aeronautics and Space Administration (NASA):
- National Science Foundation (NCF)
- Rural Energy for America Program (REAP)
It’s one of those agricultural-based grant programs available in our country. You can set up your small business to buy, build, or install renewable energy systems in eligible rural areas.
You can apply to REAP for grants to improve the existing energy-using operations or to install new renewable energy systems like wind energy, solar energy, etc.
To be eligible for REAP, you have to meet certain criteria set by the United States Department of Agriculture (USDA) like:
- Type of renewable energy system to be purchased
- An estimated quantity of energy to be generated by the renewable energy system
- Expected environmental benefits of the renewable energy system
- Quantity of energy savings expected to be derived from the activity, as demonstrated by an energy audit
- An estimated period of time for the energy savings generated by the activity to equal the cost of the activity
- The expected energy efficiency of a renewable energy system
But there are some limitations which you need to remember.
- REAP grant can’t provide more than 25% of the total cost of the project.
- If your project receives both grant and loan from REAP, make sure the combined amount doesn’t exceed 75% of the total funding.
- National Association of the Self-Employed (NASE)
If you are a member of NASE, then only you can apply for this small business grant!
At the end of each quarter, NASE collects the applications and begins the review process. After carefully reviewing each and every application, only 3 winners are chosen from that particular quarter.
If you become one of those 3 winners, you can get grants up to $4000 per month for your business!
- FedEx Small Business Grant
If you have a for-profit small business and has been in operation for at least 6 months, you can apply for this grant! Make sure your company has 99 or fewer employees.
You can win grants from $7500 to $25,000 along with the separate amount for FedEx Office print and business services.
However, make sure to create a profit and loss statement for your start up every quarter after you get a grant! This will help you to keep track of your revenue.
Best wishes for your entrepreneurial venture!
Author’s Bio: Good Nelly loves to analyze the day-to-day financial happenings along with critically analyzing the changing rules of credit, debt, insurance, mortgage, etc. related matters. She loves to share her analysis with others thus helping people to understand the exact scenario.She also maintains a blog My Way Of Viewing where she writes about her experiences.