Find The Next Grant Opportunity For Your Trucking Business Or Startup Through These 5 Resources
Whether you already own a trucking business or are pursuing a new venture, you’ll likely need financing or seed funding at some point. Existing businesses may need capital to fund expansion efforts or maintain payroll when cash flow is down. Between purchasing vehicles, making new hires, and acquiring proper insurance, startup costs for emerging trucking companies can stack up quickly.
When considering financing options for your trucking business, grants may not be the first thing to come to mind. Compared to loans, business lines of credit, or investors, grants are unique in that they do not need to be paid back. This is a major perk for businesses with limited cash or collateral on hand to qualify for traditional financing.
But free money can sometimes come at a cost. Grants for owner-operators are few and far between in the trucking industry. Dedicating time to completing applications and reports may be challenging while running a trucking business full-time. Additionally, grant terms can be fairly strict, particularly about how recipients use their funding.
To make things easy, this guide will break down where trucking businesses and startups can find grant opportunities and outline eligibility requirements for each.
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Is It Possible For Owner Operators & Other Trucking Companies To Get Grants?
Although many grants are geared towards nonprofit organizations and government entities, funding opportunities also exist for businesses across a variety of sectors. For trucking companies, grant eligibility and availability are impacted by a number of factors, including geography, number of employees, and a business owner’s demographics. For instance, some federal grant programs are specifically targeted at veterans, women, and minority business owners. Additionally, grant funding offered by one state government may not be replicated in neighboring states.
Aside from eligibility requirements, grant proposals may call for some of the same documentation and information needed to apply for loans or traditional financing. Generally speaking, funders want to know that their grant is making an impact, so demonstrating preparedness through a business plan is usually one essential component of an application.
5 Places To Look For Trucking Grant Opportunities
Looking to start a trucking company with a grant? Wondering if there are government grant programs for trucking companies? You’re not alone. Finding grant opportunities can take time, patience, and know-how. Between federal and state governments, private foundations, and nonprofit organizations, it can be hard to know where to start. These five resources are a helpful place for trucking businesses or startups to begin their grant search.
USDA Rural Business Development Grants
The USDA Rural Business Development Grant program provides technical assistance and training for rural businesses with fewer than 50 new workers and less than $1 million in gross revenue. Rural areas are defined as communities outside the urbanized periphery of any city with a population of 50,000 or more. Funding can be used for a variety of purposes relevant to trucking companies, including a revolving loan fund for start-ups, equipment acquisition, and leadership training.
Although grant funding is used to support small businesses, private companies cannot apply directly to the USDA for funding. Instead, municipalities, nonprofit organizations, state agencies, higher education institutions, and federally-recognized tribes must apply to then allocate funding to businesses in their community.
Local Initiatives Support Corporation
The Ford Foundation founded the Local Initiatives Support Corporation (LISC) in 1979 as a means for pooling public and private investment for supporting communities and individuals. In partnership with Lowes, LISC currently offers funding between $5,000 to $20,000 for eligible enterprises through Rural Relief Small Business Grants. Applications are accepted according to periodic rounds, so it’s worth checking the website for updates frequently to avoid missing out on grant opportunities. On the date this was written, the 11th round of applications was open.
Similar to the USDA Rural Business Development Grant program, eligible applicants must be located in a community with a population of 50,000 or less. For mobile businesses like trucking companies, the address where the vehicle is stored will be used to determine eligibility. LISC prioritizes entrepreneurs of color, women- and veteran-owned businesses, and companies located in historically under-served communities with limited access to affordable capital. Applications are also evaluated on the proposed impact to the community and adverse effects of the pandemic.
LISC also has regional small business grant opportunities. Trucking businesses located in New York City, Los Angeles, Boston, and Henrico and Chesterfield Counties in Virginia may be able to take advantage of location-specific relief funding.
Nav Small Business Grant Contest
Nav is a business loan company that awards two small business grants on a quarterly basis. First place recipients receive $10,000, while the runner-up gets $5,000 in funding.
Once an application is complete, businesses receive a voting link to distribute and rack up votes to be eligible as a finalist. Nav chooses five finalists from the 200 businesses receiving the most votes online. Although the grants are limited in number and funding, the application process is fairly straightforward and grant terms are flexible.
National Association for the Self-Employed (NASE)
Many trucking business owners are self-employed unless they formed a corporation for their enterprise. If you’re a member of the National Association for the Self-Employed (NASE) in good standing, you may apply for a Growth Grant for your trucking company. Winners are chosen each month and awarded $4,000 to expand their business venture. New NASE members are eligible to apply 90 days after joining.
Although Candid’s network of libraries, community foundations, and databases cater primarily to nonprofits, their resources can include information on business grant opportunities too. Upon searching “small business grants” in Candid, results included details on small business funding through the State of New Jersey and private companies like Facebook, Visa, and Wells Fargo. Instead of sorting through a quick google search, trucking businesses or startups can use Candid to save time and locate relevant grant opportunities and financial assistance.
Other Financing Resources For Trucking Companies
Grants can be a helpful source of capital for starting or growing a business, especially if you’re wondering how to start a trucking company with no money. However, most trucking companies will likely need additional financing to buy equipment, hire new employees, and take their business to the next level. Let’s take a closer look at some options and when they may be a good fit for a trucking business.
The Small Business Administration (SBA) offers several loan and financial assistance programs that can apply to trucking companies. Generally, SBA loans have low interest rates, long repayment terms, smaller down payments, and limited restrictions on how money is spent compared to private lenders.
The SBA 7(a) Loan program has seven different financing options for businesses depending on their needs. Companies that are 51% or more owned by veterans can access up to $5 million through a Veteran’s Advantage loan. The 7(a) Standard Loan is the most common path for small businesses and can provide up to $5 million in financing. The SBA can guarantee 85% of a loan up to $150,000, whereas additional funding can be 75% guaranteed. Other options include 7(a) Small Loans up to $350,000, (7a) Express Loans with 36-hour approval, and programs geared towards international trade.
SBA disaster loans can be used for working capital, to cover operating expenses, and to cover losses not covered by insurance. Since the advent of COVID-19, these funds can support businesses suffering from the pandemic or natural disasters. If your capital needs aren’t exorbitant, an SBA Microloan is another option to consider. A trucking company would need to apply with a nonprofit or community-based organization to receive an SBA loan between $500 and $50,000.
SBA Contractor Assistance
The federal government employs programs to ensure that small businesses are awarded a minimum percentage of federal contracting dollars each year. The SBA provides contracting assistance to small businesses through several programs, including the following:
- Women-Owned Small Business Federal Contracting program: Guarantees that at least 5 percent of contracts are awarded to women-owned companies.
- Service-disabled Veteran-Owned Small Business program: Sets aside a minimum of 3 percent of contracts for eligible small business owners.
- 8(a) Business Development program: Targets socially and economically disadvantaged small business owners for contracting, according to SBA criteria.
- All Small Mentor Protégé program: Matches small businesses with experienced contractors to provide mentorship.
- HUBZone program: Focuses on small businesses in historically underutilized areas.
Eligible trucking companies can pursue these opportunities to secure federal contracts, which can serve as a reliable revenue stream.
Truckers cover a lot of ground, meaning frequent expenses filling up at the pump and repairing vehicle wear and tear. To access rebates and earn points on these costs, trucking companies can utilize fuel cards (sometimes known as fleet cards) to complete payments for vehicle maintenance and fuel. This form of payment is accepted at thousands of gas stations across the United States. The best fuel cards accrue rewards totaling several cents per gallon with minimal or no monthly fees.
Business Loan Matchmakers
Small businesses have numerous options when it comes loans. Yet, sorting through seemingly endless options to find a loan that best aligns with your business can be challenging and time-consuming.
To compare multiple lenders at once, trucking businesses and startups can use a free loan matchmaking service. After filling out just one application, businesses are matched with several lenders based on their needs and eligibility. Lendio, for example, aggregates more than 300 funders to create a one-stop-shop for small business financing needs.