10 Most Common Reasons Why Government Grant Applications Are Declined

I’ve recently read a research article called “To Apply or Not to Apply: A Survey Analysis of Grant Writing Costs and Benefits” by Ted and Courtney von Hippel. The authors took a scientific approach to find out how much effort it takes to write a government grant application and how to maximize the chances of success. Being inspired by this research I wanted to share the list of 10 most common reasons why government grant applications are declined. This list is based on our experience writing applications for government grants for businesses in Ontario, Canada.

#10. Applicant or Project Does Not Meet Government Grant Eligibility Criteria

Read the eligibility criteria carefully and make sure that you qualify. Keep in mind that there are three types of eligibility:

  • eligibility of the company (organization)
  • eligibility of the project
  • eligibility of the cost

If you are uncertain about your eligibility, fill out a confidential government grant eligibility check form.

#9. Government Grant Application is Incomplete

When mandatory fields are left blank or requested attachments or appendices are missing the application fails consistency check and is immediately declined. Refer to the appendices if necessary, but provide the input to the section or field of the application. Don’t just write “See attachment”. As a matter of courtesy, do not attach what you were not required to attach to the application. And do read application instructions of guidelines thoroughly.

#8. Failure to Provide Additional Information Requested by Small Business Grants

The government grant program officials may request additional information to support the application before and after the application is submitted. That information may include your company or employees’ background, proposed project information, documents from your customers and suppliers, financial statements, invoices or quotes, etc. Make sure to provide it as fast as possible.

#7. Grant Application is Misleading, Confusing or Unrealistic

Under those, we mean generalizations, logical flows, data and fact discrepancies, non-required information, missing information, flood, unsupported budget, forecast and other numbers and industry acronyms or jargon. Keep in mind that the person who reads and assesses the application does not necessarily possess your industry, technology, service or product knowledge. Try to imagine a 5-years old kid reading your application and try to make it so the kid understood it.

#6. Applicant’s Financials are Currently in a Bad Shape

It is too risky for the government to invest in businesses that do not have a track record of productivity and growth. Look at your recent financial statements and if you noticed a lack of or sharp decline in sales, inventory or debt growth, declining or missing profits and growing losses, then it is probably too early or too late to apply for the government grant. You may apply as soon as the situation gets better.

#5. Failure to Demonstrate the Benefits to the Government

From the Government’s perspective, the purpose of grant funding is not only to ensure the applicant’s long-term growth and prosperity but also to create value for the public and community. This value has to be explicit, measurable and compelling and typically includes:

  1. Local employment growth
    2. Taxable revenue and profit growth
    3. Export sales growth
    4. New product development and R&D expenditure growth
    5. Community involvement growth
    6. Spillover effect, meaning engaging businesses and institutions in and outside your local area (for example, universities or colleges, suppliers, subcontractors)

#4. Lack of Resources to Perform the Project

This reason is not limited to your financial resources. Obviously, you should have or be able to obtain financing to match the government contribution. But it is also important for you to have sufficient human resources, technical skills/capabilities and capabilities to perform the proposed project. In some cases access to sufficient energy or material sources is critical. And the Government will look for proof of possessing those resources or your ability to acquire them.

#3. Competition for Government Funding

It is very common that there are several grant applications that are submitted within the same time frame competing for a limited amount of funding. As a result, the grant administrators must make difficult decisions about which applications to approve and which to decline. In this event they will look into your application vs everyone else’s and will approve those that promise a greater benefit to the public, are unique and realistic.

#2. Government Grant Program Ran Out of Money

The budgets of government grant programs are limited both in time and in the amount of allocated money. This is why it is important to apply as soon as possible.

#1. The Applicant Missed Government Grant Submission Deadline

Many grant programs have limited intake periods that typically last from one to three months.

We hope that this information will help you to avoid costly mistakes when applying for government funding for the business. To get started as see if you qualify for any government grants, fill out a confidential government grant eligibility check form. Provide your comment below, let us know if you had grant applications rejected and for what reason.