How to get a grant to support innovative projects

Who can become a grant holder

If we are talking about a popular government program to support the unemployed, then almost any citizen can apply for a grant, but in practice, vulnerable groups of the population have a better chance.

Vulnerable segments of the population include:

• single mothers;
• disabled people;
• university graduates;
• young professionals under 35 years of age;
• military personnel who have reached retirement age;
• citizens who have been laid off.

The state also provides grants for the development of existing businesses. If start-up entrepreneurs most often receive financial assistance, then existing businesses are given grants for the purchase of equipment, arrangement of workplaces, and compensation for rental costs.

Why should the state provide assistance free of charge? The benefit is mutual: the entrepreneur creates new jobs, receives a reduction in costs, an increase in turnover and, as a result, profits. In the region, employment statistics are increasing and overall investment attractiveness is improving. And if we are talking about the development of a strategically important area, for example, the agricultural complex, then subsidizing local producers reduces the number of imported goods and directly affects the economic power of our state.

You can find out more about grants for agriculture in the article “How to get a grant for agricultural development”

Funds run by private companies receive mentions in the media and their owners, who in many cases are prominent politicians, receive ratings boosts. One should not ignore the sincere desire of successful businessmen to participate free of charge in helping representatives of small and medium-sized businesses.

Who issues the grants?

Grant can be obtained from:

• Government structures: Committee for the Development of Small and Medium Businesses;
• Local authorities;
• Economic Development Committee;
• Union of Entrepreneurs, etc.

Naturally, each investor’s requirements for recipients may differ. Based on this, you need to choose the most suitable source of financial assistance for your field of activity.

When applying for a grant, it is important to know:

• State funds do not allocate the full amount to entrepreneurs to start their own business, giving preference to those who invest more of their funds.
• Foreign organizations more often meet entrepreneurs halfway in covering the costs of paying salaries. The state, as a rule, agrees to finance only the purchase of raw materials and equipment.
• Government agencies will most likely issue grants for business development to those entrepreneurs who create additional jobs.

Where can I get a grant?

Grants from the state to support small businesses are not the only opportunity to receive free financial assistance. Such initiatives are practiced by private companies - large investment funds, private investors, entrepreneurs and philanthropists.

There is a big difference between submitting a grant to a public and private foundation.

The state is initially interested in creating jobs, so most grants are provided to entrepreneurs engaged in trade and small-scale production. Private foundations pursue social and innovative goals, that is, the modernization of industries and improving the lives of certain groups of the population.

When submitting an application to a private foundation, it is important to adhere to the thematic principle. For example, Pavel Durov pays grants to the creators of innovative technology projects. He has been unsuccessfully approached to fund an agricultural enterprise developing a fertilizer that increases nightshade yields by 10%. The Ministry of Agriculture of the Russian Federation will be very interested in such a project.

Subsidies can also be obtained from foreign sponsors not only for business representatives, but also for individuals. For example, The Elizabeth Greenshields Foundation funds up-and-coming artists, and the Ford Foundation provides grants to human rights organizations that improve the environment. Theoretically, this could be a private Penza company providing waste removal services that needs financing for a project to create separate containers. In this case, the business plan will need to show exactly what positive effect this will have on the environment, as well as support the statements with calculations and research.

[google_grant] There is no single form for applying for a grant; most funds will require a brief description of the project, followed by the presentation and defense of a business plan.

Grant size

The amount of financial assistance to entrepreneurs varies from several tens of thousands of rubles to several tens or even hundreds of millions, namely:

• Self-employed unemployed citizens can count on an amount from 58 thousand to 300 thousand rubles from the state.
• The Presidential Grants Fund annually supports several thousand business projects, the average grant size is 2.1 million rubles.
• The Skolkovo Foundation provides grants to entrepreneurs involved in the development of the space and nuclear industries. In case of a positive decision, entrepreneurs can count on an amount from 5 to 150 million rubles!

Kiriyenko spoke about projects that received presidential grants to combat COVID

“We have now distributed 2 billion rubles from the state and 1 billion 250 million rubles from sponsors for 900 projects from 78 regions of the country. Among them are support for doctors, volunteering, support for older people,” he said. Moreover, 88 organizations that had never participated in such competitions before and 149 organizations that had previously participated but did not win were able to win. “We have an organization from the Chelyabinsk region, the Family Support Center, called “House for Mom”: they won on the ninth attempt. They are creating a mobile humanitarian aid and received 2 million 600 thousand rubles for this. It is aimed at helping families living in difficult life circumstances in rural areas,” Kiriyenko noted.

The Kremlin representative also spoke about other winners. “This is an autonomous non-profit organization “Lotus” from Dagestan, the “Breathe Deeply” project, which is aimed at the rehabilitation of health workers who have recovered from coronavirus. The project from Moscow “Outpatient Doctor” is the creation of an electronic atlas for clinic doctors, which contains the entire set of data related to the diagnosis and treatment of coronavirus infection. A large number of projects are related to the support of nursing homes, psychoneurological clinics, and social service workers,” he explained.

Let us recall that earlier, by order of Vladimir Putin, the Presidential Grants Fund was additionally allocated three billion rubles to support socially oriented organizations involved in the fight against coronavirus. Of these, in June, as part of a regular competition, one billion rubles were already distributed to 500 projects related to this topic.

Kiriyenko noted that the special competition was held in record time. “We only finished accepting applications on July 19, and today we have already distributed the money. Usually, it takes us up to 2.5 months to conduct an examination, now it’s less than 1.5 months,” he emphasized. This was done to ensure that the money reached non-profit organizations as quickly as possible. “We had a dream that all the money would be received by them no later than August - early September, so that by the end of the year they could be fully realized,” explained the Kremlin representative.

A total of 3,868 projects participated in the competition. The largest presidential grant in the competition was 70 million rubles. This amount was received by the Rusfond charity foundation for helping seriously ill children for a project to register bone marrow donors to help people in need of bone marrow transplantation. The smallest grant in the amount of 62 thousand 195 rubles was received by the project “Share your smile”, within the framework of which dentists will diagnose and treat the teeth of orphans.

Kiriyenko also announced that a new competition for grants from the President of the Russian Federation will begin on September 1, so that NPOs can receive funds at the beginning of 2021.

“This has never happened before, we have always announced competitions almost in the corresponding year,” he emphasized and explained that if the competition is announced in January, then the winners will receive funds for their projects in May. “It’s a pity for the time. In the first half of the year, people also need support from non-profit organizations, and non-profit organizations need government support. Therefore, on September 1 we are opening a competition for next year’s projects,” the Kremlin representative noted.

Instructions for obtaining a business development grant

To receive a grant for small business development, you will need to register as unemployed. To do this, you should contact the employment center at your place of residence. You will immediately be offered vacancies, which you will have to refuse with reason, after which you will be able to apply for a grant.

It should be accompanied by the following documents:

• passport of a citizen of the Russian Federation;
• grant application;
• work record book (if available) and document confirming education (there are no educational requirements);
• business plan in the prescribed form (a sample can be obtained from the employment center).

After submitting a package of documents, the employment center will conduct an examination of the business plan and make one of three decisions:

• refusal;
• proposal to finalize indicating specific problematic issues;
• OK.

In the latter case, it will be proposed to conclude an agreement, according to the terms of which the applicant will need to register as an individual entrepreneur or open an LLC within twenty days.

The size of such a grant varies and can reach a maximum of 300 thousand rubles.

Government grants are also provided to existing businesses that operate in priority sectors. One of them is the agricultural complex. Farm owners and farmers can receive grants for modernization, reimbursement of vehicle leasing costs, and even for the purchase of animals. In this case, the amount of state assistance is calculated individually and reaches even one million rubles.

There are more than a hundred funds operating in Russia that issue grants to entrepreneurs. You can find their list, contacts, as well as familiarize yourself with the requirements for applicants and the list of required documents by following the link.

How to get a grant?

A businessman who wants to receive a grant for his business must:

1. choose an organization that corresponds to the field of its activity, it is advisable to first select a niche for the business;
2. study the history of grants issued by this structure (to whom and in what amount funds were previously allocated);
3. familiarize yourself with the requirements of the organization and the rules for drawing up an application for participation in the competition;
4. collect the necessary package of documents;
5. draw up a detailed business plan with a well-described financial part, clearly established goals, possible problems and ways to solve them;
6. prepare and present a thoughtful presentation of the project - at this stage, the grant applicant will need the ability to negotiate.

Review of the application may take up to three months. During this period, the fund will have to check the availability of all required documents, as well as study the business plan. The decision that the commission will make will be based on the economic feasibility of the project, the likelihood of success of its implementation, public value, degree of technical novelty, etc.

Regarding the documents that need to be attached to the application along with the business plan, the standard list includes:

• original and copy of a document confirming the identity of the applicant;
• certificate of registration of individual entrepreneur or legal entity;
• application according to the established form;
• original and copies of the constituent documents of the enterprise.

Probability of subsidy approval

There are several ways to increase your chances of receiving a grant for the development and support of small businesses:

1. Justify the social significance of the project. It is much easier to receive a grant to open a retail store if you justify its importance and significance in your business plan. For example, a store in a village that solves the problem of purchasing essential goods for pensioners is more likely to receive a subsidy than another outlet selling smartphones in a busy area of ​​the city.
2. Justify what exactly the money will be spent on. If we are talking about opening a traditional copy center, then indicating the name of a specific laser printer model and its cost will increase the chances of making a positive decision.
3. When it comes to obtaining a grant for an existing business, be prepared to spend your own money . In some cases this is a requirement.
4. Never use copywriters or third parties to write your business plan. Specialists can only be involved in correcting and proofreading the text. A business plan is not only a tool for attracting grants, but also a document according to which you must spend funds.
5. Submit more applications. Remember, grants in many cases are awarded on a competitive basis. To increase your chances of receiving a subsidy, simply apply to different funds.

Where exactly should I go?

To make the right choice among the three main categories of organizations listed above, you should clearly understand what goals each of them pursues.

Government organizations are most willing to issue grants for business development to representatives of those categories of the population that are commonly called socially vulnerable. We are talking about university graduates, citizens registered with employment centers or laid off, military retirees, disabled people, single mothers and young professionals.

You will not receive the full amount needed to open your own business from the state. Here, preference is given to those entrepreneurs who have their own funds (at least partially) and who are ready to invest them in this business.

The preferred area for implementing public money is social or industrial. It is also quite possible to receive a grant for agricultural development here. The state willingly finances the purchase of raw materials or equipment, but the future entrepreneur will most likely have to bear the costs of paying employees on his own. Also in this case, the period of existence and operation of the enterprise is important. According to the terms of grants, it should not exceed a year or two. They also consider the entrepreneur’s ability to hire additional personnel.

Problems in attracting grants

A grant is not an investment in your business by an outside investor or organization for the purpose of making a profit. There is no need to return the funds received.

Given the lack of strict requirements and the relative ease of obtaining subsidies from both public and private funds, many entrepreneurs forget about some important features of this type of subsidy:

• Transferring funds to a bank account in many cases takes 6-12 months, which reduces the efficiency of their utilization. Let's say a company requires certain equipment or support in developing an innovative product. Submitting an application, waiting for results and summing up the results may take several months. But the actual receipt of funds into the organization’s bank account often occurs only after six months. During this time, the very idea outlined in the business plan may become irrelevant.
• Searching for a fund, collecting documents, filling out an application form, writing a business plan, and defending it also takes a lot of time, because the requirements are different each time. But this does not at all guarantee a positive decision.
• In most cases, the grant amounts are relatively small and have only a small positive impact on the entrepreneur's business. For example, a grant from the state for starting a business in the amount of 100 thousand rubles, which an unemployed person receives, may seem like a large amount, but if this entails the obligation to employ two workers and pay all deductions for them, then this clearly implies a considerable investment of one’s own funds.

Results

A grant is a convenient and understandable tool for raising funds for the opening and development of a business. Many entrepreneurs use several grants annually, thereby minimizing the amount of loan funds. This not only has a positive effect on current financial indicators, but also indicates the reliability and stability of the business, which increases its capitalization.

The use of grants systematically increases investment attractiveness, which in the future can help attract much larger investments from investors interested in making a profit. And this usually takes commercial activity to a completely new level.

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