Federal Funding for Small and Midsize Manufacturing Companies
An executive in a small or medium sized manufacturing company seeking capital to grow their business often thinks of several obvious choices for funding. Traditional banking finance for operations, equipment purchases, facility acquisition or asset-based lending collateralized by accounts receivable are usually the first options for companies. Investment from venture capital groups, mezzanine lenders, friends or family is often the second and less favorable option pursued.
There is a non-traditional option available to manufacturing companies which meet certain criteria. That option is to apply for funding from a federally funded small business program.
Grants Available Only for Small Businesses
Federally funded small business programs are available for a number of reasons but all have a requirement of being a small business. Most of the federal grants can be searched on grants.gov.
Funding for Small Tech Businesses
For small businesses across technology areas and markets including internet of things (IoT), edtech, smart health, robotics, and other related areas, the National Science Foundation (NSF) invests in companies with no required equity.
Funding for Small Manufacturing Businesses Related to Energy
The Department of Energy has a similar program to NSF's for those companies manufacturing products in the energy space.
Funding for Small Manufacturing Businesses Related to the Military or Federal Government
For companies seeking to develop and manufacture new technology or products which might also have a federal or military application, the federal government runs the Small Business Innovative Research (SBIR) program. With annual funding in excess of $2.3 billion, this program is an often overlooked source of growth capital. The program is focused on commercialization of new technology but is open to any US-owned company with less than 500 employees.
Great Lakes Trade Adjustment Assistance Center
The Trade Adjustment Assistance for Firms (TAAF) is the only federal program specifically designed to help American manufacturers who have been hurt by foreign competition. Firms can qualify for up to $75,000 of matching funds to implement critical business improvements. The Great Lakes Trade Adjustment Assistance Center (GLTAAC) administers the program in Ohio and is funded by the U.S. Economic Development Administration. Manufacturers can qualify if they have experienced:
- decline in sales
- decline in employment
- lose of business to imports
Matching funds can be used for sales and marketing, manufacturing and other recovery expenditures. Click here for more information.
The Center for Design and Manufacturing Excellence (CDME) has experience with many of these programs and has helped our small business clients identify, develop, capture and execute federal growth grants. If you are interested in hearing more or see a program that may be applicable to you, please don’t hesitate to reach out to us for assistance.