Do you want to start a new business or side hustle, but you just don’t have the funds? Don’t let a lack of capital stop you from pursuing your dreams. There are a ton of organizations out there that offer grants to help entrepreneurs at all stages of their business, but it can be challenging to get your grant proposals approved. We’ll take a look at the different types of funding proposals and what you need to write an effective grant proposal.
Benefits of Obtaining Funding Through a Grant Proposal
If you’re not familiar with how grants work, you may be wondering why you would choose grant writing as your method of obtaining capital to fund your new business. There’s one main difference (and it’s a big one) between obtaining money from a grant as opposed to a loan: you don’t have to pay the money back. This is huge for an entrepreneur who is just starting out, as it will mean you don’t have a cloud hanging over your head, knowing that you need to start paying your loan back with interest. In addition, your project will have the clout of being associated with whatever organization granted you funding, which can convince potential clients or investors of your validity.
Types of Grant Proposals
Depending on the grant you are applying for, funding proposals can come in a few main formats. Always make sure that your grant proposal includes everything the grant requires, exactly as written. If the proposal doesn’t meet all of the requirements, it may be disqualified automatically, even if your idea is sound. Here are three of the most common types of grant proposals you will see in your search.
Letter of Inquiry (LOI)
A letter of inquiry is the most direct way to reach out to a foundation with a grant proposal and find out if they are interested before investing your time in creating a full proposal. It is usually two or three pages and summarizes the project you want to be funded. When writing an LOI, you should go into enough detail that the organization can understand exactly what you intend to do, how you will achieve it, and why they should be interested, but don’t get into the nitty-gritty at this stage.
Once they have received your LOI, if they are interested, they will request a more in-depth funding proposal. This saves your time and that of the funder and lets you know right away where to focus you