How Maryland Startups Can Leverage State Grants and Loans

Maryland Startup funding options

Access to funding is crucial for any small business to succeed, especially in Maryland’s constantly changing economy. The state has many small companies, so it offers a range of funding options designed just for them. Maryland has many programs to help small businesses grow their economies. These include state-funded programs for minority-owned businesses and programs for companies that need help qualifying for traditional Maryland startup funding options.

Can You Borrow Money from the Government to Start a Business?

There are several ways for the U.S. Small Business Administration, typically called the SBA, to help small businesses get loans. Many SBA loan programs offer more open terms and include business coaching, technical help, and loans. One example is the 7(a) Loan Program, the SBA’s most popular way to secure loans. The borrower and the involved lender work out the exact terms of an SBA 7(a) loan if they follow the SBA’s rules. The SBA says that the 7(a) loan is usually the best choice when buying real estate for a business. It can also be used for short- and long-term operating capital, to pay off current business debt, or to purchase supplies, furniture, and fixtures.

But these loans might have minimum dollar amounts. If you need a loan for less than the minimum amount, ask your bank to help you find an SBA Microloan Program lender. The SBA says that its Microloan program gives small companies short-term loans of up to $50,000 for working capital or to buy things like inventory, supplies, furniture, fixtures, machinery, and equipment. These kinds of loans can only be gotten from middleman lenders, which are non-profits with experience lending money and giving technical help.

Maryland Grants for Startups

What is the Maryland Small Grant Program?

The Maryland Department of Housing and Community Development helps local economies grow by giving grants to small businesses. The department wants to use investments to bring empty places in business corridors back to life. It also wants to help small businesses by giving them money to start up or grow, creating jobs, and boosting the local economy.

There are two ways for a Maryland startup to get funding. First, economic development groups can apply for Project Restore 2.0. This will encourage businesses to spend in downtowns, Main Streets, and other business districts by giving groups money to give to companies. You can also apply for cash directly through Business Boost if your small business is new or growing and is in a Sustainable Community.

How Can a New Business Take Advantage of Grants?

A business grant is money given to a company that needs it to grow, hire more people, or improve. Grants are usually given to new businesses, businesses that want to grow, or groups that need money for study. There are two main types of grants: government-sponsored ones, which come from federal, state, or local bodies, and those given by businesses or organizations.

There are usually a lot of grants available from the federal government all year long for practically any kind of business. On the other hand, city governments give out fewer grants. But fewer people are applying, so you won’t have to deal with as much competition. Also, each grant program has its own requirements, so you should find out which ones your business can apply for.

Check Qualifications

A person applying for a small business grant must be a U.S. citizen, permanent resident, or a qualified non-citizen. You also have to be running a small business that could use money for something, like hiring more people, buying tools, doing research, or growing. Minorities, women, veterans, and people who live in rural areas and can’t get to city services are more likely to get grants.

Gather Financial Information

Before your Maryland startup can apply for a grant, it will need a detailed business plan and a project description. You also need to have up-to-date information on your business’s finances, such as payroll, equipment costs, supplies, and any other relevant financial information you may have. Also, get your financial records ready to show.

Maryland entrepreneur shaking hands with funding partner.

Show How a Grant Can Help Your Startup

This step is often the hardest for small business owners because convincing someone that you deserve money takes work. It is helpful to think of this step as selling your business to investors. In the end, you need to be able to defend the company you’ve worked so hard to build from scratch to get funds.

You worked hard and spent a lot of time on your business because you believe in its goal. To move forward, you need grant makers to support your plan. For most grant applications, you must include the same paperwork you used to get other types of business funds. Your company’s history, Mission and goal statements, a cover letter, and a project description.

Submit the Application

Once you have your financial information and grant writing, you can apply through the right site. If you use Grants.gov, the government website, you can apply for grants right there. If you want to get a business grant, you will do so through the company’s website.

But make sure everything is correct on your application before you send it in. Grant writers are there to help you explain your project and goal. They should ensure that every piece of writing you give them answers the right questions and is grammatically correct. Also, your accountant should check your bills three times to make sure they are up-to-date and contain accurate information.

Using Grant Money

Many startups focus on the wrong things first and spend their money in unwise ways. In fact, many startups waste their money on things they could have put off, like renting office space, hiring people, and advertising.

Getting a grant is an excellent chance for your business, but be careful about how you spend the money awarded to your startup. Grant money should only be used for what it was given for. You can make the most of your grant money if you use good accounting practices, set clear goals, and don’t depend on handouts for all of your money.

Final Thoughts

In Maryland, small businesses that want to borrow money need to be very smart about it and carefully consider the risks and changes in interest rates. In this way, security and growth are ensured, while financial overextension is avoided. When small companies look for ways to get money for their businesses, they have to think about many things, like how the struggling economy will affect them in the future, how important it is to have good bank relationships, and the personal investment options out there. Each of these things is very important to the financial future of a Maryland startup.

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