Looking for funds to expand your business? There are the traditional sources, like a bank, your Aunt Sally or your savings. But did you know that federal, state and local governments offer a range of financing programs for small businesses? You may be eligible for low-interest loans, venture capital and grants.

Before you rush off to the local government office, it’s important to understand that not all businesses may qualify. Funding is only available under specific circumstances. And they may require strict compliance and documentation to be considered.

The Possibilities

Here are some funding sources available:

• Loans – The Small Business Association (SBA) sets guidelines for financial institutions to make a loan. Then the SBA guarantees loans will be repaid. It is not available to businesses that have access to other financing on reasonable terms.
• Venture Capital – Generally high net-worth individuals or firms are willing to invest in exchange for a share or ownership in your company. These investors will likely monitor/participate in how your business is run. They are willing to take risk for the right business but they expect higher returns over the long-term
• Grants – According to SBA.gov, these are given only to specific industries or for specific purposes. For example, it might include grants for expanding childcare centers, creating energy efficient technology, or developing marketing campaigns for tourism. In some instances, you may have to match the grant amount with your own funds

Where to Start

Here are some resources to locate what funding sources are available and how to apply:

• Loans and Grants Search Tool (sba.gov/loans-and-grants) – Answer a short, online questionnaire and you’ll get a list of potential loans, venture capital or grant sources with links to more information
• Grants.gov – Allows you to find and apply for federal grants. There is also a mechanism to track your application as it is being considered
• SBIR.gov – Shows if you qualify for grants under the Small Business Innovation Research and Small Business Technology Transfer programs

Expanding your business is a great thing. But funding that expansion can be challenging. Uncle Sam might be willing to help, if you have the right stuff.