Federal Grants
Why Apply for Federal Grants?
Eleven federal agencies spend approximately $100 billion each year on extramural research and development (R&D). These agencies are looking for companies with innovative ideas and are willing to provide grant funding. If that’s not enough, here are seven additional reasons to include grants in your business plan:
A federal grant can range from $100,000 to several million dollars.
Grants are not loans. You do not have to pay back the money.
Most grants do not require matching funds or equity.
The intellectual property rights remain with your business.
You retain all ownership of your business.
A federal grant award provides verification for your business and idea.
A federal grant award can be a leveraging tool to attract venture capital.
Here’s how it works! The federal grant process is very competitive. To compete, you must have a truly innovative idea and it must meet needs or solve problems deemed to be vital to our national interests. Fortunately, each agency issues topics that they deem vital. Only six federal agencies control 95 percent of these funds. (See Agency Topic Areas for a list of the agencies and their websites.)
Something to be aware of! A significant portion of the R&D grant funding is limited to nonprofits, governmental entities, or universities and is not available to for-profit businesses. Much of the federal R&D grants that are available to businesses are open to companies of any size, which means small businesses may be competing against large businesses or even prime contractors for the grant dollars. (Be sure to read the section Is a Federal Grant Right for You?)
Fortunately for small businesses (SBIR/STTR), there is a federal grant/contract program just for small businesses called Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR). (See About SBIR/STTR for more information.)
Lots of Idaho Companies Have Won! Preliminary data for 2008 shows that eleven Idaho companies received a total of 2.8 million in federal SBIR grants. An additional seven companies received congressional earmarks totaling over $15 million. (See Idaho Awardees.)
Learn More About Federal Grants
To learn more about federal grants, who is eligible, and how to apply, go to the Quick Links and peruse the web pages concerning federal funding. Or, if you prefer, you can follow this link to watch a series of short videos that explain the basics of the federal grant process.