Obtaining Business Grants for Your Small Business

Whether you are already a successful organization internationally or an entrepreneur looking to launch your great idea in New York City, finding the necessary funding is certain to be a roadblock in your mission to growing your business in New York City and the U.S. market.New York City is unique in that there are a variety of ways to approach funding. While there are a number of well established and successful angel investors and venture capital funds in the city, some of the biggest funding opportunities come from federal grant funding for small businesses. Many people fail to realize the number of grants and other methods of funding which are available; these could be the key to getting your business on its feet in New York City.

 Government Funding for NYC Startups

 One of the biggest sources of funding for small businesses in New York City is a the federal government’s Small Business Innovation Research initiative, or the SBIR.

Government agencies that have a research and development budget of more than $100 million are required to allocate 2.5% of their budget to SBIR grants to help small businesses get started. There are currently 11 federal agencies involved in the program.

• Department of Agriculture
• Department of Commerce - National Institute of Standards and Technology
• Department of Commerce - National Oceanic and Atmospheric Administration
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of Homeland Security
• Department of Transportation
• Environmental Protection Agency
• National Aeronautics and Space Administration
• National Science Foundation

 Each of these agencies has their own programs to provide funding for research and development for small businesses.  The process can be quite time consuming, and awards are granted on a competitive basis after proposal evaluation.

The funding options available from the government in the form of grants generally have strict criteria that must be met and followed in order to be awarded the funding.  Some of the key criteria that might present issues for international entrepreneurs are that applicant businesses must be:

• Organized for profit, with a place of business located in the United States.
• At least 51% owned and controlled by one or more individuals who are citizens or permanent resident aliens in the United States, or
• At least 51% owned and controlled by another for-profit business that is at least 51% owned and controlled by one or more individuals who are citizens or permanent resident aliens in the United States, and
• Cannot have more than 500 employees, including affiliates.

 The residency and citizenship issues are clearly a primary concern for entrepreneurs looking to enter the U.S. market in New York City with the help of these grants. Finding a United States based partner can ease these concerns, but be prepared to give up majority ownership and control over your business idea.

Another federal funding option comes in the form of the Small Business Technology Transfer, or the STTR. The main goal of this grant is to “support scientific excellence and technological innovation through the investment of federal research funds in critical American priorities to build a strong national economy.”Similar to the SBIR, federal agencies with funding of more than $1 billion are required to invest .3% of their R&D funding into the STTR. This list is far smaller, with only five agencies involved.

• Department of Defense
• Department of Energy
• Department of Health and Human Services
• National Aeronautics and Space Administration
• National Science Foundation

 These grants have similar requirements to the SBIR, with the key difference being that you are required to pair with a federally funded R&D center to receive the funds. The partner must meet one of the following definitions:

• Nonprofit college or university
• Domestic nonprofit research organization
• Federally funded R&D center

 Winning this funding is generally a highly competitive undertaking, but don’t let the competitive aspect of the funding keep you from presenting your case.  These two grant opportunities represent the highest funding you will be eligible to receive from the federal government when getting started in NYC.

Accessing Federal Funding as an International Entrepreneur in NYC

Yes - the competition to receive federal small business grants is fierce, but there are a number of non-profit organizations aimed at helping small businesses obtain these funds.

One of the most notable non-profit organizations is NYC Seed. NYC Seed is a partnership of four influential organizations in New York City which provides funding, mentoring, and support for small businesses. The organization has numerous success stories in their portfolio covering a variety of industries.One of the organizations involved with NYC Seed is the Industrial + Technology Assistance Corporation, or ITAC. ITAC coaches small businesses through the process of getting SBIR or STTR funding while also providing a number of helpful resources on their website. They also provide coaching on how to approach venture capital funds.The New York City Economic Development Corporation, or NYCEDC, explains its core mission as raising economic development in the five boroughs of New York. International entrepreneurs are certainly a key to achieving their mission of economic development. Their website offers information for international businesses looking to operate in New York City as well as resources to help the economy of New York City grow. Some notable helpful tips include how to find office or incubator space, how to find partners and talent fit to your organization, as well as information on other programs for entrepreneurial development. One of their most notable success stories is American airline giant JetBlue.Even the NYC government is happy to provide incentives for operating out of New York City. Between tax breaks and other money saving offers for small businesses, the government does its best to make operating in the city as achievable as possible. They have a great deal of resources for small businesses in New York City available on their website.

Funding Your Business in New York City

Finding free government funding in New York City is competitive, but with the help of organizations like NYC Seed and ITAC, you can prepare your proposal to highlight why you stand out among competitors and are a natural fit for New York City’s economy. While it is by no means a fast process, the funding is there if you work for it – and the city is happy to have you!