Grants & Funds for Social Enterprises: What to Know
Three stacks of quarters on a table against a forested background
Everyone has to start somewhere. This is a well-known fact of life, but that can be a small comfort when you’re struggling to find grants and funds for your business.
How can you convince possible investors of the power of your idea without financial support? While this uphill battle may seem steep, you’re not facing an impossible task. Thousands of entrepreneurs find the funding and support they need to become a financial success.
We’re going to explore grants and funds for social enterprises below. With a little knowledge and reasonable expectations, you have the possibility to become tomorrow’s success story.
Crowdfunding is a Fast-Growing Niche
You’ve likely heard of popular crowdfunding platforms like Kickstarter and IndieGogo. Why wouldn’t you? Crowdfunding has been an incredible resource to provide entrepreneurs with the funding they need to see their dreams realized.
Did you know Kickstarter alone has funded nearly 545,000 projects? Even better, the American crowdfunding sector has hit $600 million in the past few years, making it one of the fastest growing finance niches. What makes crowdfunding such a useful resource is its relatively low risk. The more people who get involved, the less everyone has to pay.
The downside to crowdfunding is its unpredictability. Without a strong marketing campaign and business sense, you run the risk of being underinvested.
Grants are a Reliable Resource
Does crowdfunding seem a touch too risky? Grants are a reliable resource for entrepreneurs of all backgrounds and experience levels.
Grants are a common tool for small business owners and students, giving people a financial boost with a targeted goal. A grant can be as small as a few hundred dollars and as large as a hundred thousand. While the idea of ‘free money’ can seem too good to be true, remember the function of a grant! You’re actually giving the investor a spot in their portfolio with your future success story, so it’s a win-win.
What makes grants a difficult choice is the stiff competition for social enterprise funding. The sooner you start applying, the better.
Starting your enterprise is challenging at the best of times. We’re eager to smooth out the financial process with qualified expertise so you can focus on what you do best.
Three investors in a meeting standing in front of a wooden table
Direct Loans are Tricky, Yet Powerful
Now for one of the trickiest funds for social enterprises: direct loans. Loan debt is one of the most common financial hurdles in the United States, so it’s understandable to be wary.
If you’re careful about which direct loan you apply for, you could have a powerful tool in your toolbox. Direct loans give you exactly as much as you need to reach your goals. Compare this to crowdfunding, which fluctuates wildly depending on a mix of marketing and luck. Grants also have financial limits and can put you in the position of needing several to reach your minimum.
The direct loans you apply for should have low interest rates and a specialization in social enterprise funding. One example of this is the SEFA Loan Fund.
Competitions are a Fantastic Gamble
Do you have the skill and the spark to stand out among the crowd? Consider entering a competition in your niche or skillset.
Competitions are similar to grants, but with a competitive twist. The end result will usually have a few winners picked from the pile, with the first spot being given the most money. Keep in mind that even if you lose, simply entering the competition shows your drive and ambition. This is a very attractive feature for investors, industry connections, and future competitions.
Competitions are a gamble, but one with the odds skewed in your favor.
Self-Funding is the Most Straightforward Method
When in doubt? Save up money and invest it in yourself. Self-funding is the most straightforward method of gathering funds for social enterprises.
Grants give you a limited amount of money, which can be frustrating when you’re trying to reach a budget limit. Direct loans come with interest rates and crowdfunding is a little unpredictable at the best of times. Last but not least, competitions can take extra time you may not have.
Self-funding means you have to be patient and budget carefully. If you’re okay with putting your dream on hold for a few years, this is the route for you.
Mix Up Your Grants and Funds for Maximum Impact
Who says you only have to stick with one method? Consider mixing up your grants and funds for social enterprises to have the best of all worlds.
It’s best to choose grants and funds that already complement each other. For example, the unpredictability of crowdfunding pairs nicely with the more reliable nature of grants. Likewise, you can also consider self-funding to the furthest of your ability, then take out a small direct loan for the rest. Just make sure you’re in a position to pay it off quickly.
A stack of coins on several colorful paper bills
Conclusion
Grants and funds for social enterprises are more diverse than they’ve ever been. Today millions of clever, hard-working entrepreneurs have financial access to turn their dreams into reality.
Crowdfunding is one of the fastest growing financial niches, though it can be a little unpredictable (especially if you’re new to the game). Grants are steady and reliable, but only offer a limited amount of money. Competitions are a great way to challenge yourself and market your efforts, but can be a gamble.
Self-funding is the most obvious choice and one you should consider if you’re worried about paying back loans.
Which grant or fund should you consider? Contact us today to get qualified advice on your financial options so you can begin building your next business venture.
