Have you ever pondered all on the best ways of utilizing your grants? You are in the right place. African American Grants platform is committed to helping you make the necessary commitment to get your grant. No doubt, learning ways to utilize grants can be quite challenging for many. As a matter of fact, this is a major challenge facing every business whether big, mid-size, small, or micro-sized in strength and capacity? Access and utilization of funds are very critical to the survival of every business.
If you are a business owner, looking for grants in any capacity, from Illinois business grants to Illinois small business grants for minorities to Arkansas ready for business grant, we’re here to guide you to finding ways to utilize your grants.
What kind of funding is one looking at? Is it money from funds saved in the bank? Is it money borrowed from a financial institution especially the commercial banks? Or is it a grant from the government, a development agency of a foreign agency? These are questions every potential entrepreneur asks themselves before starting a business.
Apparently, the most common type of funding which comes from commercial banks usually comes with unattractive interest rates and other stringent conditions that may be inimical to the success and growth of these businesses.
What are Grants?
Grants are basically free money that you can apply for from the federal government, state, or grant issuing agencies. Grant on the other hand is a friendlier source of funding targeted to assist businesses or specific agencies and individuals in achieving a specific objective(s). It is usually granted to cover a certain period of time and repayment is either time-bound or non-existent. Some of the popular grant types include student grants, business grants, infrastructure grants, agriculture research, and development grant, etc.
In business, a grant can be defined as a specific amount of money given by a public organization, private establishment or individual, government, and her agencies to achieve a specific set of objectives that has a public benefit. A grant can be targeted to increase, for example, African American participation in certain areas of business-may be the manufacturing of hair products, etc. or a grant can be targeted to increase African-American attendance in business schools aimed at enhancing the quality of business decisions from African–Americans, and increase their membership in executive boards of organizations cut across America. Grants are not expected to be paid back like loans.
A historical perspective can illuminate the critical role of grants in the advancement and promotion of economic growth and development in America. Grant emanated from land grants; when the federal government used proceeds from land sales to create and develop public schools and universities. In 1816, the federal government directed that states be given 5% of the net proceeds of land sales within their boundaries with the stipulation that 3% should be used “for the encouragement of learning“.
How to Find Grants for Your Business
Small business owners are always on the lookout for grants. Finding these grants can come with its set of challenges, however, knowing where to look can be helpful. During the next 50 years, the system of grants for education and research expanded, and federal conditions were imposed. States in the nation were encouraged to spend monies on education and certain development areas which had Hugh multiplier benefits to create wealth and alleviate poverty. Areas such as research in agricultural science and farm production, research in transportation, etc. became the priority.
And as the years went by grants became more sophisticated and acted as a needed catalyst to economic growth and development in the United States of America. The Federal government involvement in grants architecture backed up with congress support lead to its categorization as social, welfare, health, security, transportation and communication, housing and community facilities, labor, agriculture and agric resources, veterans’ services and benefits, education, and general research, national resources (not agric), and general government.
African-American participation in grants started after the abolition of the slave trade and slave ownership in America, especially after the American civil war. At the end of the civil war, African–Americans even though free found it difficult to get jobs; rapid railroad projects coupled with the growth in agriculture due to the massive, and aggressive federal government grant, limited opportunities for them.
African – Americans were clustered into tiny places in urban areas, segregation became legalized and institutionalized to deprive them of legitimate opportunities that had the potentials of eliminating poverty and promoting economic prosperity.
The crow legislation of the early 20th century was one notorious law that depressed and deprived African–Americans of equal chance to “pursue happiness”. As protest both within and outside the country gathered momentum, the African-American population gradually liberated themselves from institutional racism and social barriers aimed at keeping them in the caves of poverty and crime. The federal government included them in the social, welfare, health, and security grant. They were captured in the housing and community facilities grant targeted at providing blacks with better housing and safer communities.
As the years rolled by more institutionalized grants giving organizations targeted the black communities to create equal opportunities to start a business and acquire the needed skills to be members of executive boards in recognized big American companies. Organizations such as the Rockefeller Institutions are well known in this regard.
What Are the Benefits of Grants in Business?
A business is usually structured in three basic forms. They are capital, liability, and asset. Capital is the number of funds needed to start a business. Accountants normally call this a loan to the business which is expected to be paid back with interest. Liabilities are a debt to a business and are usually categorized as non-current and current liabilities. While assets are things owned by the business aimed to assist its operation and achieve its objectives. Assets are normally categorized into non-current and current assets.
The most difficult part of the business is getting enough funding to run your operations. The one to run operation is called circulating capital. Because of the difficulties a startup may encounter, circulating capital becomes a critical part to decide if a business survives or not. Grant most times plays an important part in taking care of circulating capital. Grants can be used in helping startups acquire certain raw materials and also encourage a specific race or gender to a particular industry. In no particular order, the benefits of grants are too numerous but some of them are:
Increased Funding to A Business
It provides increase funding to a business with no possibility of repayment only achieving the laid down objective agreed upon between the grantor and the grantee.
- Management and Administrative Support
Most times grant-giving organizations give essential management advice and administrative support to the receiving business or individual.
- Research- Finding Exposure
Successful applicants for financial support via grant recipient can get valuable fact-finding reports from research conducted in a particular area of interest.
- Access to Other Funding Sources
Efficient and effective usage of grants can qualify a business for further funding from the same grantor or other grant-giving organizations. Even conventional financial institutions will feel comfortable partnering with such businesses.
- Business Growth
Without a doubt, grants in business are targeted to achieve business success, increase in employment opportunities, increase in revenue as a form of taxable income to the government, and improvement in living standards by communities harboring these businesses.
What Are Some Grants Challenges?
Some of these challenges are in no particular order and in no means exhaustive. They are:
Lack of A Proper Structure:
Most of these businesses are not well structured. No organization structure. Their finances and financial books are not well organized and perhaps there is no guarantee that they have the capacity and ability to achieve the agreed objective.
Lack of Experience: Very few black businesses have experience with ensuring successes and guaranteeing efficient utilization of grants in business.
Embezzlement, Funds Misappropriation, and Maladministration: This is a major obstacle hindering the successes of many black-owned businesses. The misappropriation of funds to irrelevant non-business-related activities has been the major chemical component that has led to the death of many black-owned businesses. It is important that black-owned businesses show commitment and prudence in managing their businesses.
Lack of Information: Information is power; without it, nothing can be achieved. It is important that information about grants be shared aggressively via conventional media and online media platforms. Utilizing platforms such as Facebook, Twitter, Instagram, Tiktok and Snapchat can help bring this information to members of the black communities. It is also important to use conventional electronic and print media outlets such as radio stations, internet radio stations, TV stations, Black programs, newspapers, and black magazines. Using all these will help take this information to the black communities.
What is the best way to utilize business grants?
Ensure That You Have a Business Plan
A business plan is a projection of what your business wants to achieve in terms of revenue and non-revenue objectives and what it will take to attain this planning objective within a specified time period. If you cannot write a business plan, hire the service of a financial expert who is skilled in the act of business plan writing. A business plan will help guide you in your attempt to achieve the agreed-upon target(s) between you and the grant-giving organization.
Avoid Fund Diversion
It is important to avoid personal and business conflicts that may cause you to divert given funds. Diverting funds can cause stress and damage ones’ reputation if you are unable to achieve the agreed-upon target(s).
Ensure Prudent Fund Management: ‘
Ensure you have a road map and a good strategy to utilize this grant when the money comes. Once the money is put into use, always periodically compare the achieved results to targeted results. This will help guide you, as it will enable you to determine your business variance, that is if it’s negative or positive. A variance is a difference between the achieved and targeted results. If it is negative, that means the achieved result is less than the targeted result, and vice versa.
In conclusion, the grant is a critical component of business success. Historically grants had played an essential role in the attainment of the American dream of the 19th century, especially after the civil war. Schools and other public institutions were built by grant monies from the federal, state, and local governments. A lot of businesses enjoyed these huge benefits from grants. Grant can help emancipate members of black communities from poverty and social vices.