In this post, I will tell you about small business grants in 2020. Small business owners around the world experience the effects of the spread of coronavirus and the cultural ripples it creates. Businesses are grappling with cash flow and while certain states have support for small business owners and you may apply for coronavirus business loans as well, you might be asking what are the other choices.
To realize any business idea, you need a certain starting capital. If you do not have money to start your own business, do not give up your dreams. The easiest way out of this situation is to seek help from the state. You will learn how to get small business grants for start-up entrepreneurs in 2020 from this article.
Who are the small business grants provided to?
Almost every entrepreneur wants to get a grant for starting a business. However, only unemployed citizens who are registered in the employment center, or entrepreneurs who wish to expand their existing business, can apply for a cash subsidy.
When issuing small business grants in 2020, foreign sponsors insist that the allocated funds be spent in full accordance with the business plan. The state pays more attention to the social protection of the population and the employment of citizens. In this regard, foreign investors usually finance enterprises that have already taken part in such programs, and state funds often issue grants for starting a business for start-up entrepreneurs. At the same time, they give preference to socially vulnerable groups of the population:
- University graduates;
- Citizens who are under reduction;
- Single mothers;
- Disabled, etc.
According to the law, a grant for starting a small business in 2020 can be received by citizens who have reached the age of 18 who want to engage in entrepreneurial activity in our country.
Now let’s try to figure out where to get a grant for starting a business. First of all, visit the district center for the development of small businesses. There they will tell you where to turn and what documents you need to collect. In addition, information on tendering for state grants for starting a business can be found in regional print media, or on the Internet. The deadlines for filing applications and requirements for bidders can also be found at the Ministry of Economic Development and the local administration.
If you know exactly what to invest in so that they generate income in 2020, make a competent business plan and feel free to apply for a grant. According to the law, it should be considered within 1-2 months, but in some cases, you have to wait a year, or even more, so you need to be patient.
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Small business grant terms
To take part in the competition for a grant for opening a business, you must provide the following package of documents:
- Properly executed application. If the applicant incorrectly compiled an application for participation in the tender, he may be refused registration;
- For some competitions, you need to fill out an entrepreneur questionnaire and attach a copy of your passport;
- A document proving that the participant has studied the basics of entrepreneurial activity (certificate of completion of courses, or a diploma of higher education);
- Certificate of registration of business activities;
- A certificate confirming the payment of taxes;
- Documents on job creation;
- Payment documents indicating that the payment of production costs is made at the expense of the company;
- Business plan. It is desirable that this be a cost-effective innovation project.
Sometimes there are additional requirements for documentation, but the main package usually remains unchanged.
In some cases, small business grants for opening a business may be refused due to the small amount indicated in the application. Therefore, when drawing up the expenditure part of a business plan, it is better to indicate an overestimated amount, since the commission can reduce it by 2-3 times.
When calculating costs, it should also be taken into account that funds are usually received in parts, so you need to think about how to use them correctly in each specific period.
Also, do not forget that after you win the competition, a grant for starting a business can be obtained in 2-3 months, and sometimes even in a year. To speed up the process, you need to choose a fund that matches your future activities. In this case, the issue will be resolved as soon as possible.
It is worth noting that participating in competitions for grants is a great way to get rich from scratch. If you clearly fulfill all the requirements of investors and report on time for the targeted use of funds, you can receive grants in the future for the development and expansion of the business. Many aspiring entrepreneurs who have taken this opportunity have already made great strides.
To whom and for what grants are given?
Any person can receive grants from the state for starting a business if he:
- Engaged in entrepreneurial activity for at least 1 year;
- It is registered in the employment center;
- Fell under job cuts;
- Concluded a leasing agreement for the purchase of equipment;
- Author or owner of innovative technology;
- Uses innovative equipment in work;
- He takes an active part in exhibitions and fairs.
From this, it follows that start-up entrepreneurs who want to implement some interesting project, or socially unprotected citizens of our country, can count on state grants for starting a business.
As a rule, about 30% of start-up entrepreneurs receive grants to start a business in the provision of services. Another 20% open their own production and only 12% are engaged in trade.
The applicant for a cash subsidy, which can pay part of the cost of the equipment with his own funds, gets a huge advantage over other participants in the competition. In this case, the commission will be sure that the entrepreneur takes his business seriously and believes in its success.
It is worth noting that state grants are intended solely for the establishment of a business. These funds cannot be used to pay wage workers. Foreign sponsors relate normally to this expense item.
Typically, the state finances agriculture, production projects, science, and education. Foreign funds are more interested in such areas of activity as ecology, economics, culture, and society. Private foundations prefer to support innovation, business, and the economy. This is the best option for sponsors who are looking for where to invest in 2020.
If you try hard, you can find a fund that will finance the most extravagant project. And yet, in order to guarantee a grant, you need to look for a more profitable investment in 2020 in order to make a profit. Experts recommend that beginners focus on the service sector.
You can open:
- Training courses;
- Auto repair shop;
- Cleaning company;
- Design studio;
- Marketing agency.
If you don’t know where to invest to receive monthly income, you can rent commercial and residential real estate. But in this case, one cannot count on state support.
Requirements for Applicants for receiving financial assistance
Each fund that issues grants has certain requirements for the bidders. As a rule, these requests are similar, therefore a number of general requirements can be identified that applicants for receiving financial assistance must fulfill:
- Filing an application;
- Project development;
- Project protection;
- Project implementation;
- A full report on the spent funds.
There are also many small nuances that should not be overlooked. It often happens that a person presents a brilliant project, but cannot figure out the targeted spending of funds, and is refused. At first glance, it might seem that spending money is easy, but if it’s someone else’s funds received for the implementation of a specific project, everything is much more complicated.
Therefore, before submitting an application, carefully study all reporting rules – deadlines, the report form, and the procedure for providing information. In this case, you can easily report for every penny spent.
The easiest way to get a grant is to rent or buy a room, as well as the purchase of equipment, raw materials and supplies. In addition, it must be borne in mind that almost all government programs for financing small businesses are aimed at combating unemployment, so the commission gives preference to entrepreneurs who create new jobs.
The most important question that many aspiring entrepreneurs are looking for the answer to is how to win a grant to open a business.
The commission, which makes decisions on applications, carefully checks all documents, and in particular the business plan. It should contain all the necessary financial and economic indicators and their detailed justification. Describe in detail where it is profitable to invest money so that they work in 2020. In this case, the commission members will get a clear idea of the prospects for the development of your business and the effectiveness of the project.
An entrepreneur who does not provide such calculations is likely to be refused. In addition, the business plan must clearly indicate where the money received will be spent. Everything needs to be calculated in such a way that the commission members are convinced that these funds are not essential for you. The state does not support newcomers who want to start their own business exclusively at the expense of free subsidies. It is advisable that the amount of your personal start-up capital is approximately two times the size of the subsidy.
Another important point is the creation of jobs. The more people you can hire for an enterprise, the better since each project that is subject to government funding should be aimed at combating unemployment. But at the same time, the number of jobs should not have a negative impact on the profitability of the project.
To get a grant for opening or developing a business, you need to spend a lot of time and effort. First of all, you need to decide where it is profitable to invest money, create an interesting project, present a business plan in order to report on the intended use of funds in the future. This is quite a troublesome business, but worth it.