What Is a Small Business Grant Proposal?

First of all, what is a small business grant? Well, it refers to the sums of money that are provided by a party, usually the government, a foundation, or even a very established company in order to aid startup businesses in their operations and to help them get their foot off the ground. As stated earlier, a small business grant is very enticing for amateur entrepreneurs since it doesn’t have to be paid back compared to a loan.

A small business grant proposal is a business document that serves as a formal written request from someone, usually a startup entrepreneur, that is submitted to a potential donor such as an organization so that they can award the startup business and get it going on merit. This document can serve as one of the stepping stones for individuals who are looking to get into the world of business.

Important Elements of a Small Business Grant Proposal

Here are the elements that comprise an effective small business grant proposal; These are the basic elements and keep in mind that unique ones may exist on your proposal depending on the small business that you’re planning to start.

Cover Page. The cover page serves as the first impression of the entire proposal document, so it is imperative that this must be done properly and professionally to make a good impression on the reader. In creating the cover page of the document, make sure to include the startup business name, the date that the document is to be submitted, and the name and any other pertinent information of the corporate representative designated to engage with the grantor.Cover Letter. You can look at the cover letter as another “first impression” of the entire proposal document. In writing this part of the proposal, make sure to describe your company in a short but concise manner since this part is only meant to be short. Most importantly, you should be able to provide an adequate explanation as to why your startup business is a good fit for the grant and what you want to accomplish with it.Table of Contents. This part of the proposal document serves to outline the headings and sub-headings of the different elements of the proposal, as well as their respective pages. Including this section is a big plus for the readers since it makes it easier for them to find the part they want to read.Executive Summary. In writing this part of the proposal, you should focus on the main reasons why the grant for your small business is needed. The number of funds needed should also be stated here. You should also keep in mind that this section should clearly describe the contents of the grant proposal in a brief manner. In other words, this section provides a summary of the main aspects of your small business and the core components of your grant proposal.Needs Statement. This section of the proposal is also deemed crucial since grant evaluators have to know why funding is being sought after for the small business and how the grant money will be used to solve an important need. This part of the proposal document should provide a summary of the facts, numbers, and statistics that your grant reviewer will need to make this judgment. Additionally, it also pays to be concise in writing this section.Description of the Business. This section serves as the core of the entire proposal document. It describes what your small business is about. You may also write in this section what you aim to achieve in your business including your measurable goals.Purpose. This part of the business grant proposal serves to explain the purpose of the grant that is to be given, such as expanding the business, acquiring more talented staff, securing more specialized equipment, funds for advertising, and so much more.Evaluation. The purpose of this section is to let the grant reviewer identify the best possible data you wish to track so that the grantors know how their funds are being used/what the impact of their funding is.Budget. Another crucial section of the grant proposal, this section details the total cost of the small business that needs funding. When other sources of funding are present or to be expected, it should be broken down in this section as well.Supporting Documents. This section of the proposal may also be added since the grant reviewer might want to see financial statements, tax-exempt letters (especially if you are a non-profit organization), and other relevant information that might increase your chances of winning the grant.

Mistakes in Writing a Small Business Grant Proposal

Here are the mistakes to be aware of when creating this type of document:

Too many attached documents. You may think in the first place that more documents will make your small business appear more legitimate to the grantors, thus increasing the chances of the grant being approved. But that is certainly not the case since the majority of grant writers will advise you precisely what to submit. Sending much more attachments than requested will not boost our chances of receiving the funding. What’s more important is to obey the regulations set by the grantors. Unnecessary extra elements may irritate grantmakers who are reading a large number of bids.Misplaced priorities. When creating a grant proposal, it is essential to keep your priorities in check. And when creating your proposal, ensure that you fit your information to what the grant organization requested. Aside from that, your business blueprint should be precise and include information on each phase of the growth and development strategy. For example, if the proposal solely concentrates on the existing problem rather than the solution that the company would give, it may not pass scrutiny.Haywire language. Once the grant proposal is overly complicated or difficult to read, it may have a lower probability of getting accepted. It is important to concentrate on communicating information in a clear, coherent way while avoiding excessive frills. The proposal should begin by addressing the impact of the enterprise on the neighborhood. Furthermore, when writing the proposal, determine what the company plans to do and create a plan for achieving the company’s predicted goals.Lack of focus on details. This can be an easy mistake to make as certain foundations can be very picky when it comes to the format of a grant proposal. They may need a specific page length, page margins, typeface to be followed, and so on for your grant request. Even though these little elements may not appear to be vital to you as an entity, you should be aware that the grantmakers have a purpose for setting such standards, and as such, you must follow them or risk having your application rejected. Don’t put in all that effort only to have your proposal declined due to difficulties.Too many technical terms. Every field, including business, has its own set of highly specialized technical terms. However, using making use of jargon will just not persuade your evaluator that you are knowledgeable or that you are the best applicant for the funding. As a result, it is recommended to avoid using any internal acronyms or jargon. To increase your chances of getting your grant request approved, simplify any complex phrases to make them easier for grantors to comprehend.

Steps in Writing an Effective Small Business Grant Proposal

One of the most important ways of securing grants for your small business is to write an effective proposal document. Sure, it may take some time and effort, but when the grant application is successful, it’s well worth the effort. With that being said, here are the steps to be taken in creating this document.

  • 1. Assess Your Business Plan

    In this first step, make sure to conduct an assessment of your business plan first before creating a proposal. In this step, make sure to examine your business plan and compile a list of all you know about your company’s mission and ambitions. An assessment is needed because the proposal committee wants to know not just what kind of business you run, but also what your goals are for that firm. Always ensure to take the effort to write this information down ahead of time for yourself.

  • 2. Conduct a Research on the Grant Program

    After assessing the business plan, this step will then follow. When you’re trying to apply for grant funding for your small business, it is good practice to conduct research on the program itself first. Study the funding program, its goals, and the people in charge. In other terms, do some preliminary research to see how you may modify the grant proposal so that it will match the grant program’s standards. Understanding the proposal committee’s perspective can assist you in writing the pointers needed for a successful proposal.

  • 3. Draft the Proposal

    After conducting the research on the granting program, and after creating your proposal points that will suit the program the best, this step will then follow. In this step, begin composing your first draft by expanding on each point in your outline. This initial draft does not have to be good or flawless because it is only a draft and you will be able to improve it later. You must highlight the elements of your small business that the sponsor would like the most. Their criteria or recommendations for drafting the paper will provide you with hints as to what they are.

  • 4. Go Through the Important Elements

    As you draft the proposal, it is essential that you go through the important elements of it. The important elements of the grant proposal include the needs statement which tells the grantors why the funding is needed for your small business, the description of your target market, the purpose of the grant funding (ex. acquisition of more staff and sophisticated equipment), the budget section of the proposal (which should detail how much funds do you need and if there are any external sources), and any other supporting documents that the grantors may require.

  • 5. Iron Out Any Mistakes

    After writing down the important elements of the grant proposal, this step then follows. As you iron out any mistakes in the document, Edit sentences as needed to ensure that your thoughts are clear and concise. You may read it aloud to yourself to get a sense of how it flows. This stage may take a lot of time since a significant amount of rewriting is to be expected. Look for more meaningful to replace those that serve as fillers. Substitute complex jargon with ones that are much easier to understand. Correct any typographical, spelling, grammatical, or stylistic problems. Also, make certain that your entire proposal is consistent with your initial summary and plan.

  • 6. Conclude the Proposal

    After everything has been done, it is now time to perform this procedure. In this step, take your time to create the conclusion part, which should be around one paragraph long, to reaffirm your request for grants and need in one line and explain how your small business will continue the initiative if financing is no longer available. Also, take a moment to appreciate the foundation for the opportunity to apply, and include a final request for help.


What causes are eligible for grant funding?

Grant funding will not be available for every initiative. Applicants must fulfill the eligibility standards given in the grant proposal rules, which means they must fall into one of many categories that are eligible to receive grant funding. For example, an organization that provides free employment training to physically or mentally challenged persons would be automatically eligible for funds from numerous awarding organizations provided it could demonstrate its work ethic, legitimacy, and financial stability.

What is a state grant?

State grants refer to funds that are awarded by state governments to qualified individuals/organizations in order to fund specific projects, initiatives, or small businesses. The application process in a state grant is generally not complex, however, the rewards that the receiving party will get from the state are generally less in amount compared to, let’s say, private grants or federal grants.

Why is a grant proposal preferred by small businesses compared to taking a business loan?

Grant funding might be an excellent method to obtain the funds you require to start or develop your business. They are frequently less restricted than smaller business loans, and the process of application is much easier. If your grant request is accepted, you may be able to access additional resources such as mentoring, networking opportunities, and seminars.

An effectively written small business grant proposal will give you a very big chance that the potential grantors will approve your request and fund your small business. Keep in mind that once you receive the funds, it is critical that you use them as intended in the document and periodic updates/monitoring from the grantors is considered good practice to track how the funds are used. In this article, various sample templates of a small business grant proposal are available for you to freely download and use as a reference.