Grants are economic aids disbursed by government or private organizations to a recipient. Community service, flourishing small businesses and research are some of the activities qualified to receive these funds. Grants are normally not paid back unless there is a condition attached. However, there are some which need to be returned at a later date, but without (or lower) interest or any form of taxes. However, a recipient must exhibit that they are financially incapable on their own, and that their project is in line with a government’s thrust area.
Common criticisms of government grants include stern conditions and awarding these to wrong individuals. However, we should also take note that federal government begins to diversify its offers to cater everyone, regardless of establishment, size or affiliation. In fact, around $360 billion were already given to businesses, research, student aids and organizations since implementation. Applying for a grant is much easier, thanks to technology. Online application is now possible, although you will have to personally appear in an office, at some point.
- 1 Who is Eligible for Government Grants?
- 2 Business Grants
- 3 Student Grants
- 4 Personal Grants
- 5 Housing Grants
- 6 Medical Grants
- 7 Minority Grants
- 8 Private Grants
- 9 Separating Myth from Facts about Government Grants
Who is Eligible for Government Grants?
The United States government differentiates an individual from an organization for grant-giving purposes. An individual is an applicant who submits grant applications without representing any nonprofit associations, business and any other group. Persons who are over the age of 18 can apply. Note that government grants with large amounts are only applicable to institutional groups, but some can still be availed by individuals. In 2016, over $150 billion were already given to college grants alone. You should be reminded that these do not solely come in the form of tuition fees. Under President Barack Obama, individuals can now choose from a variety of economic assistance which applies to them.
Meanwhile, a nonprofit organization can also apply – as long as its goals are in line with government plans in general. For these groups, it is imperative to check whether they are eligible, by knowing what they represent. The same can be said about small businesses and other associations.
Individuals and groups will have to register online first, for record-keeping purposes. The range of information you may provide depends on when you fill up forms. Some grants only require filling up close ended questions, while others will have you answer through essays. You might even have an interview, in case the grant involves large amount of money. Moreover, remember that applying for grants can be quite competitive. You are not alone aiming for limited slots in a certain year.
You can avail from $15,000 to $250,000, depending on the grant you applied for. It goes on to say that nonprofit organizations and small businesses are usually provided larger amounts, yet individuals are still welcomed to apply. The United States government is encouraging eligible persons to apply, as a part of its plan to stimulate the economy. Everyone knows the country is still experiencing the after-effects of the Great Recession of 2008, and the government is still injecting money to revive the market. Hence, this is a good time to apply for a grant. On the other hand, a grantee should account for every penny spent on their respective project. The government has a set of criteria to determine whether you used it efficiently. Any unused portion will be returned to the Treasury.
Are you a budding entrepreneur who wants to expand a small establishment? The United States government sees this as essential in rebuilding its economy. You will provide jobs and stimulate the nation’s sluggish economic performance since 2008. Small businesses also maintain the competitive enterprise, which makes up the backbone of market activity. To the owner, it is never easy to operate a business. Start-up costs are the biggest hurdles for them to surpass in successfully building. If you think you need a boost to your current funds, these are the following areas for which you may ask for government grants:
For business start-ups:
- Small business, medium-sized business and nonprofit organizations.
- Minorities planning to start a business.
For ongoing businesses:
- Purchasing new equipment, expansion and renovation of your business.
- Covering up operating costs when you find difficulty in doing so.
- Conducting research for your business.
- Acquiring real properties, such as land.
- Free consultation (technically, a government assistance)
A business grant will help you cover some costs associated with start-ups. In fact, major companies like Apple, Nike and FedEx were recipients of business grants in the early days of their respective businesses. Interested organizations may apply to the Small Business Association (SBA) to avail this kind of assistance. This is an independent government agency that was established in 1953. The SBA also aids, counsels and protects the interest of small businesses. Appropriations for the organization in 2016 amounts to $853 million. Its help does not only apply to the United States, but also to Guam, Hawaii, Puerto Rico and US Virgin Islands.
SBA provides grants to businesses in the form of low-interest loans. The next concern is to ask whether a threshold is required for your firm to qualify as a small business. The United States sizes depending on the industry you want to join. For the purpose of discussion, small business are generally defined with having less than 500 employees (for manufacturing) and at most $7.5 million in annual receipts (for non-manufacturing). You should also remember that the qualification can go as low as 250 or 1,000, especially in the energy sector. The same can be said with annual income, since some go as high as $25 million.
The organization generally does not specify what businesses are eligible for business grants. Rather, the agency painstakingly outlines which are not eligible. Moreover, your application will only proceed if you have proven you exhausted other forms of financing before seeking help. Then, you can demonstrate you have a need for the grant. It is highly suggested you prepare a business plan of your firm, before going to the SBA. There are also some universally applicable requirements. To be eligible, businesses must possess the following:
- Qualified in the threshold in terms of size and annual cash receipts.
- Registered to operate in the United States (foreigners might be granted)
- Present a proof it needs financial assistance
- Be able to demonstrate a need for the loan proceeds for sound purposes.
- Not be delinquent on any existing debt obligations to the U.S. government
If you think you did not meet at least one of the above, check if you may apply for special considerations. Gaining approval through these provisions require additional requirements, though. The SBA wants to avoid undue or excessive grants to businesses, as these might find difficulty in settling the loans later. Some are the following cases in which you qualify under these considerations:
- A franchiser must have a stronger extent of control than an employer-employee relationship. The person must also have the right to have a share in the business’ profit, depending on his efforts.
- Recreational facilities and clubs are eligible, if the facilities are open to the general public. If there is a need of membership, it must not be discriminatory to any group.
- Farms and agricultural businesses applicants must first explore Farm Service Agency (FSA) programs offered by the government.
- Reconstruction of fishing vessels are also eligible for cargoes which capacity weighs less than 5 tons. If you are seeking funds for the construction or reconditioning of vessels with a cargo capacity of five tons or more, you must first request financing from the National Marine Fisheries Service.
- Privately owned medical facilities, including hospitals, clinics, emergency outpatient facilities, and medical and dental laboratories, are eligible; recovery and nursing homes are also eligible, provided they are licensed by the appropriate government agency and they provide more than room and board.
Legal aliens are eligible, but the level of business risk is measured depending on their status. Applicants who are currently having judicial case or on parole are not qualified to apply. The SBA also gives a comprehensive list of businesses ineligible for government grants. Do not waste time trying to apply if your firm is in line with any of these:
- Firms with public accountability (banks, lending institutions and life insurance companies).
- Owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds.
- Foreign establishments in the United States. However, foreign-owned businesses registered in the US may qualify.
- Multi-level marketing firms, where compensation depends on the sale of someone under them.
- Firms engaged in illegal activities. These are also disqualified if they are earning 2.5% of gross revenues from items of sexual nature.
- Firms whose gambling revenues comprise of more than a third of their annual earnings.
- Government-owned entities.
- Organizations established for indoctrinating religious beliefs. Businesses primarily engaged in political or lobbying activities are also not eligible.
- Cooperatives, other than producer based ones.
- Applicants who are earning more than 1/3 of their gross annual revenue SBA Loans.
- Firms which also own equity interest to other firms. Speculative businesses (such as oil exploration).
There are special considerations regarding ineligibility in applying for business grants. Your application will not be considered if you defaulted on a prior obligations to the government. The disqualification also applies to any business whose capitalization:
- Has 20 percent or more by a person associated with a different business that caused the government to have incurred a loss related to a prior business debt.
- Has 20 percent or more by a person who is incarcerated, on probation, on parole, or has been indicted for breaking the law or committed a crime due to moral corruption.
Pursuing higher education is expensive, especially when you eye to study in private universities. Tuition and other fees cost $30,000 or more in a school year. Rates are lower at community colleges and public universities, but the annual cost of enrollment is $10,000 and $5,000, respectively. Hence, financial aids in the form of college grants are also available for Americans. This is also the most common means where a struggling student can get subsidies, as hundreds are available nationwide. You may choose depending on the category that suits you the most. There are grants applicable to certain degrees, minorities, students and subjects.
The US government can offer as much as $50,000 per year to subsidize your studies. Other funds are given by your own colleges and universities and other institutions. These grants may or may not be settled, depending on the agency awarding it. Grants are available in almost every program, yet these are also subject to the following basic eligibility criteria:
- You must be a US citizen or an eligible foreign national.
- You must demonstrate a need for financial aid, and this will be only used for educational purposes.
- You are registered with Selective Service if you are a male and not currently on a military duty.
- You must be qualified to pursue higher education. A high school diploma is generally needed, but you can also avail grants by having a General Educational Development (GED) Certificate. Home schooled students are also eligible.
- You filled up a Free Application for Federal Student Aid (FAFSA)
- You have a Social Security number, unless you are a foreign national from Micronesia, Palau and Marshall Islands.
- You do not have outstanding balance from other federal government grant. A defaulted individual is someone who has obligations which aren’t paid for over 270 days.
Are you presently a college student? You can also avail college grants if you qualify for the following:
- You are currently enrolled in an eligible degree for the specific grant.
- You have satisfactory academic progress in the school you are studying.
- You are enrolled at least half-time to avail loan funds.
Applying for college grants only requires the submission of necessary forms. If you are successful, your college will determine how much aid you will receive upon your enrollment. Make sure you didn’t commit mistakes in filling up the forms though, as these affect the amount of the grant, or your eligibility itself. As stated earlier, there are plethora of scholarships and grants available in United States. Do you think you passed the basic eligibility? Here are some you might wish to apply for.
Federal Pell Grants
Unlike student loans, Pell Grants do not have to be repaid. For the academic year 2016-2017, the maximum amount of assistance awarded is $5,815. This is only available for undergraduate students who have yet to earn their first degrees. You may only get a portion of it (or a whole), depending on the imposed conditions for this scholarship. A Pell Grant may only be availed on a single school, and you may receive it for a maximum of 6 years (12 semesters). Nonetheless, you are also allowed to apply for other student aids, if you are qualified for it.
State Grants and Scholarships
These are merit based, meaning these are given to students who met the required grades or athletic tests, or to those ranked the highest in their classes. State Grants are also awarded to minorities or students with disabilities, based on different factors. The vast majority of universities offer this kind of scholarship, hence, you may inquire to their respective offices if you are interested.
College loans come in handy if you need a larger grant. However, these need to be paid back in the future, albeit with lower interest. You might apply for a government-based one, which is more convenient in terms of repayment. Federal loans are only required to pay when you left school or when you finished your studies. This is contrasted with private loans, where payment has to be made periodically. Interest rates are also relatively lower, amounting to 4.29%, versus 18% of other private firms.
Federal Stafford Loans are among the most popular loans availed by university students. And it’s easy to see why. The package boasts flexibility, considering you can loan for as little as $6,000, but as high as $50,000 per year. A student may claim for many Stafford loans, as long as he hasn’t yet reached the limit. Interest is payable while still in school. The principal must be repaid six months after graduation.
The other Federal Loan is Perkins, which awards up to $5,000 annually. There are available private student loans, but these generally offer stricter rules and higher interest. Regardless of the one you are applying for, remember that both will entail reasonably large obligations. Student loans have become the new nightmare for many new graduates.
Private scholarships might be harder to find, since they provide higher allowances without the need to repay later. Nonetheless, there are over 180,000 offers from companies and other private individuals. For example, the Coca Cola Foundation accepts about 1,400 students per year for their undergraduate studies. They were given various amounts, depending on the type of grant they qualified for, ranging from a minimum of $1,000 to a maximum of $20,000. Churches, foundations and other nonprofit organizations also provide student aids. As stated, these can take a while to find, but you might search for a package that even includes subsistence allowance.
There are college grants which focus on a certain group. The Women’s Independence Scholarship Program, for instance, aims to empower women by sponsoring single mothers who want to attend school. Created by Sunshine Lady Foundation, they target those who experienced emotional and economic turmoil.
Personal grants are given for various purposes, as long as the person needs financial assistance. The reasons might range from emergency grants to covering living expenses, renovating your home or payment of credit card dues. Actually, this exists for those whose needs do not entail either business or housing grants. The amount receivable also varies, depending on your loan. You can apply for personal grants with the following payments:
- Household expenses (rent, utilities and groceries)
- Child care
- Community improvement
- Training and education (for teachers)
- Caretaking expenses
- School Supplies
- Real Estate Taxes
- Purchasing a Car
- Legal services
- Public Transportation
Similar to other government grants, Personal Grant applications are quite competitive. However, a lot of institutions, including private and charitable ones, hand out cash gifts. It is just a matter of finding these. The US-government sponsored site usagrantapplication.org helps prospective grantees by posting personal grants available at the moment. By registering, you also get information about the grant itself, as well as documentary requirements. You may also inquire in your local city office for financial or unemployment assistance.
These are given to those who purchase a home for the first time. Since the housing bubble, the United States government is trying to resuscitate the economy by offering low-interest loans related to real properties. Grants awarded amounted to $140 million in the midst of numerous foreclosures today. Interest rates are at the lowest level in 35 years. Housing grants can also be used for other purposes, such as repairing your current home or rental properties. You may also use the proceeds to buy another rental property using this loan.
The Federal Housing Administration (FHA) offers more a lenient set of rules as compared with other loans. The FHA works under Department of Housing and Development (HUD), so an FHA-approved lender is needed before you can purchase a HUD house. It does not give loans directly to qualified awardees, but it hedges insurance with FHA-approved lenders. In turn, these institutions permit lower mortgage costs on your house.
The downpayment is as low as 3.5 % of the purchase price. Your credit score is not much of an issue, granted this loan is a collaborative effort of the government and banking agencies. This is available on 1-4 unit properties. The Energy Efficient Mortgage Premium, on the other hand, assists families to save money from utilities by improving the facilities in their respective homes. You also get help from a qualified home energy assessor, to choose the best energy package. It should also be noted that the total price may or may not be wholly financed. The grant also depends on the market value of your house at the time of renovation. In case you only need insulation or thermostat in your house, the FHA loans up to $3,500 for borrowers.
Lastly, the US government also approves housing assistance for senior citizens. Rural Housing Repair and Rehabilitation Grants is offered to the low-income elders who live in rural areas and do not have the capacity to pay other loans. The package for home reparation is set at $7,500. Meanwhile, HUD offers reverse mortgage for 62 years olds who own or have paid a considerable amount on their properties. This package gives them a privilege to withdraw a portion of the home equity.
It goes on without saying that there are universal requirements for these loans. You must not have defaulted in other federal grants. As borrower, you must also demonstrate the capability to pay other obligations, such as homeowner and other related fees. Your income, credit history and other living expenses will also be examined.
Also, there are other grants available in the Department of Housing and Development’s website. The site is also kind to assist you in your applications and your search for FHA-approved lenders.
The US government is also offering health care assistance, aside from Medicaid. You just have to determine what you need and what Health Care criteria you are able to meet. The U.S. Department of Health and Human Services (HHS) employs programs that allows low to moderate income earning individuals to receive grants. The amount you are rewarded depends on various factors, like your annual income and the number of dependents. If you think you are not qualified, your children may be eligible, thanks to the burgeoning focus on Health Care these days.
The application process is the same as with other government grants. You just have to register, then submit a form online and wait for further processes, if you passed the screening. In case of sudden hospitalizations, it is advisable to ask the hospital about grants they offer, especially if you are uninsured or on a low-income. Other nonprofit organizations also offer assistance, so it’s worth asking your church or a foundation about medical grants. If you have a chronic disease (e.g. diabetes), you will likely find an organization which will subsidize a part of your medical costs. You only have to follow their respective instructions to be eligible.
Although foreign nationals are eligible for Federal Pell Grant, they are also advised to pursue grants for their respective ethnicities. The majority of these are given to minorities, in order to pursue a higher education or for a conduct of research. For example, the US government funds $70 million established Hispanic universities. Grants centered for Asians normally include exchange studies abroad. Other grants cater to to broader needs, like attending African-Americans’ psychological well-being. Disadvantaged minorities will also receive grants applicable according to their needs. These vary in terms of qualifications, so you should check if you are eligible for the one you want.
These are normally given by private nonprofit organizations to an individual or to other organizations. They have a set of criteria aligned with their organizational mission for your eligibility. These nonprofit organizations exist for societal purposes. Some are memorial charitable institutions, which promote the causes of the grantor or remember a prominent national figure. They do not put emphasis on your paying capacity, as long as you meet the purpose of their programs. These grants include the following, but are not limited to:
- Helping the homeless, disadvantaged or elderly
- Gathering additional funds of certain organizations
- Supporting a business’ operations
- Aiding children, women’s groups or people of colors
Separating Myth from Facts about Government Grants
One common misconception people have when it comes to government grants is thinking that getting one is easy. You might find one on the internet that says it awards assistance after paying processing fees. Some might even give procedures that look too good to be true. Chances are these aren’t really legit organizations, or could be foundations that have provisions that are too restrictive with your operations. Hearing from a friend of a friend about the existence of a grant does not make it real, either. Contact the government agency concerned, if you are having qualms about entering a deal. Searching for its website isn’t enough, since an elaborate scam pulls this trick. In case that kind of grant exists, you will have to face too many conditions that make you unable to recover your advance payment.
Grants available for small business are often involved in high technical areas of industry and teaching programs. As stated earlier, you must have a pre-existing business, before you can apply for business grants. The SBA does not award these to just any establishment, so take a look at the nature of the assistance before you apply. Housing grants may not consider your credit rating, but they still look at your payment capacity to some extent. The US government needs to protect itself against defaults and unnecessary actions, after all.
You should not worry about funding sources, though. There are literally thousands of them, waiting for applications. And they do not charge any fees upon submission of forms. What you should be keen about is whether you applied for the right government grant. Remember that you will have to employ the nature of this government grant to remain eligible. Polish the business plan or application forms you have to submit. Seek advice if possible, since you will have to show the merits of your proposal using those papers.
How was your experience when you applied for a government grant? Share your experience by commenting below.