One of the most common questions among entrepreneurs seeking funding is “When is the right time to apply for government grants?” This article will clear up some common misconceptions about when to start the grant writing process.
What should I do before applying for funding?
- Define your project: Governments don’t fund businesses or organizations, they fund projects. Start by determining the nature and objectives of your project, which could include: capital expenses, job creation, innovation, export, technology adoption, programming, and more. Having an idea of the project’s total cost is also very helpful when it comes to determining which funds you want to pursue and will expedite the grant writing process.
- Research funds: Create a short list of funds that match your project’s objectives. You can do your own research using Fundsearch or order a custom report from Fundingportal.
- Check deadlines: Some funds accept applications on an ongoing basis, while others are quarterly and some are annual.
- Plan for grant writing: Small grant requests for less than $100k can typically be completed within 1-3 business days, while larger grants can take 3 or more weeks to prepare.
- Consider the approval process: Smaller grants can take 6-8 weeks to process by the government, while larger grants can take 6 or more months. Typically, expenses incurred prior to a grant’s approval are considered “sunk costs” and won’t be eligible for government funding.
In summary, organizations seeking grants under $100k should ideally begin the process of searching and applying for grants at least 2-3 months before their project is planned to start, whereas organizations seeking funding for large-scale projects should begin 6-9 months before.
Can I apply to more than one grant?
Yes, your organization can secure funding from different sources for the same project. In this situation, “stacking rules” will come into play and determine the maximum percentage of eligible costs that can be covered by a government funder.
Some funds will also allow applicants to receive multiple grants for different projects.
Fundingportal always advises its clients to apply to at least 2-3 grants at a time to maximize their funding outcomes. Grant writing services are available for purchase here.
Should I seek government grants before or after securing private sector capital?
Many entrepreneurs seek government funding before raising capital from external investors because grants are “non-dilutive,” i.e. companies receive funding without giving up equity. In addition, angel investors and venture capital firms find companies that have secured government grants more attractive than those that haven’t.
On the other hand, government funding programs always provide a certain percentage of project costs. The remaining percentage must be covered by the company, its investors, or a loan. In some cases, companies pursue government grants and private capital on parallel paths in order to maximize their funding outcomes.
I got a grant. What do I do now?
Government funding is a process, not a task. Smart applicants seek funding for every new project they undertake. Many choose to sign up for custom alerts to receive a notice when a new grant that suits their profile is launched.