Have you been thinking that you want to start a business? So much planning goes into following your dream, and we know it can be a struggle to finance its startup and daily operations. We also know that finding funding opportunities for your enterprise can be harder during a global pandemic.
You may not be eligible for small business loans. You also may not be open to additional loan debt to manage or want to max out your credit cards because you may want to conserve cash. If that’s the case, small business grants may be your best option.
Small business grants are funds made available for economic development. Many are from government or nonprofit programs and you don’t have to repay them. If your small businesses meets the granting organization’s criteria, you can apply and may receive funding.
Most grants are for specific business purposes, so it’s important to understand where to find and how to get a small business grant, since neither is simple. Start by researching them and understanding the rules for getting and using them. Be prepared to commit significant time to this process.
FAQs About Small Business Startup Grants
Many who want to start a business know this “free money” is available, but most business owners have questions about where to begin. The Small Business Administration, or SBA, is here to help.
The government agency can provide general information about this unique funding, including what makes small business startup grants different from small business loans. They also make sure you understand how to get a small business grant.
If you have questions, they can get you the answers you need. So, if you’re wondering, “Where do I find small business grants for service-disabled veterans?” The SBA can provide you with overviews of programs specific to your business or affinity group—like veterans.
What Government Grants Are Available for Small Businesses?
There are several sources of federal government grants available to qualified small businesses. Best known is the Small Business Administration (SBA), which most people know for its loans. Since 1953, the agency has helped small businesses launch, operate and grow. That includes offering grants directly and in partnership with other organizations, which are available to most small business owners and types.
But other federal government agencies and state and local agencies also provide small business grants. You can find grant funds for national business activities by going to Grants.gov where you’ll learn what’s available, how to qualify and how to apply. If going global is your interest, you’ll want to apply for a State Trade Expansion Program (STEP) grant.
However, grants like these three below are so unique that they aren’t easy to find by typing “small business startup grants” into a search engine or extensive database. If one or more of these applies to your small business activities, visit their websites to learn more.
- SBIR and STTR Grants: These are short for “Small Business Innovation Research” (SBIR) and “Small Business Technology Transfer” (STTR). SBIR is for entrepreneurs focused on developing technology headed for sale to the public. STTR grants target those small research and development businesses focused on technology innovation and existing technology improvement. SBA and multiple federal agencies take part in offering these highly competitive grants.
- National Institutes of Health (NIH): This agency offers its grants under its parent, the Department of Health and Human Services (HHS). Their focus is providing grants to small businesses in biomedical technology research and development. Besides SBIR and STTR grants, which require a complex application process, there are also institute specific grant programs.
- USDA Rural Development Business Grants (RDBG): This competitive grant program provides technical help to small rural businesses and cooperatives. Small means fewer than 50 employees and up to $1 million in annual revenue. That agency strictly defines “rural,” too. This fact sheet provides a detailed summary of the program and its eligibility requirements.
There are multiple other small business grant programs that require a deep dive into the Grants.gov or the Catalog of Federal Domestic Assistance (CDMA) databases or Challenge.gov website to find. The latter is a list of federal government agency-run creative, technical and scientific competitions that lead to monetary prizes. By helping those agencies solve problems, the contest drives innovation.
Who Qualifies for Small Business Startup Grants?
A wide variety of business owners qualify for small business startup grants. Qualifying factors are based on your location, business size, business type and military status.
Is My Business Eligible for a Grant?
Eligibility for grants for small businesses, including COVID-19 grant funds, depends on your business type and the grant you’re applying to get. For example, granting agencies may only extend grants to those with certain statuses. So, you have a better chance at finding and getting approved for grants if you’re a veteran, woman or minority business owner, Native American or LGBT.
Having those certifications might increase your grant eligibility. Beyond certification, most grant programs, including those through SBA and Grants.gov, have strict requirements for applicants.
Criteria can differ by each granting agency, the location of your business, the grant maker or your business owner category. Check eligibility requirements for each grant by going to its site and calling or emailing before you apply.
Do You Have to Pay Back A Small Business Grant?
Most business owners are hesitant to use external funding for their businesses. In fact, fewer than 1% of all U.S. businesses use federal or state grants to fund their business. Unlike loans, however, grant money doesn’t require repayment.
But that’s why grants might have far tougher eligibility requirements than loans. Usually, you don’t require security for grants, but there may be limits to the number of employees you can have, annual revenue your business makes or the location where your business can be.
How to Apply for Small Business Grants
It’s possible to receive highly competitive and high-dollar grants regularly, since some get awarded every year. But the key to scoring these funds is learning how to get a small business startup grant.
The application process for receiving small business startup grants is hard. Each grant application can be long, taking weeks to complete and submit. That’s why you’ll only want to apply for grants that you have the best qualifications for and have a good chance of winning.
Fortunately, there is a lot of free help for doing these applications right. Here are the steps for most grant applications:
- Find free help to start the process. Contact your local SBA or your Small Business Development Center (SBDC) for free resources for researching grants and understanding their requirements. You can take training courses to learn how to get a small business startup grant, form relationships with granting agencies and officers and completing grant applications.
- Research each grant carefully. You must understand the eligibility criteria for you and your business, since most grant applications ask about both. Know the deadlines and meet them or get your application rejected. The agencies rarely give extensions, and most agencies don’t make exceptions to deadlines for individual businesses.
- Compile and submit all the documents required. The grant making agency or organization provides a detailed list of them. But they usually include current financial statements, and often, a business plan. Incomplete or incorrect applications lead to delays and grant denials.
- Understand certification or verification requirements. If you must meet them, make sure you do before applying. That’s where the SBA or your local Small Business Development Center (SBDC) can be helpful.
- Make sure you need not register with any required government databases. Those include System for Award Management (SAM) or a state or local government grant database before you apply. If you do, thoroughly understand and complete the right process.
- Know how to write a strong grant proposal. This is a specialized skill and you may have to pay someone to help you. Or, you could learn through a local nonprofit, the SBDC or SBA.
- Hire professionals when necessary. For example, a qualified accountant and attorney or reputable consultant could improve your grant application. Research them carefully or get referrals from people you trust.
Avoid paying for access to information on government grants or paying vendors to complete your grant applications, unless you’ve verified them. Instead, use the resources here to find and apply for grants at no cost. Also, make sure you’re not applying for a legitimate grant that requires you to put up matching funds, like cash or financing.
Other Grants to Start a Small Business
Government agencies aren’t the only ones offering grants to small business owners for startup or business development. They’re also available privately through national or community foundations, corporations and research institutions.
Finding many of these grants funds may require a database subscription, but choose reputable ones like Candid.org that share accredited grant fund resources.
Here are a few corporate grant funds to consider.
- Visa Everywhere Initiative: Startups and fintechs that innovatively solve business payment problems could win $150,000 in prizes and global recognition from Visa. The brand presents the four finalists to its Payments Forum annually.
- FedEx Small Business Grant Contest: This contest is open to for-profit businesses with fewer than 99 employees and in operation for at least six months. The cash prize is $25,000 and funds towards print and business services. Read the full eligibility rules for this annual contest.
- Patagonia Corporate Grant Program: Innovative nonprofits that work to preserve the environment can get $20,000 to $30,000 from the brand. Criteria are strict and geographical locations limited. Read the eligibility rules for more information.
Grant funding through private organizations also may require business certifications for women, minorities, LGBT or veterans. The application process is equally demanding to applying for government grants, so you can use the rules for applying above. Just understand where there are differences by checking with the granting organizations.
While applying for grants is hard, there are additional steps you can take to ensure success. Get to know the people and organizations where you’re applying for grants, whether government agencies or private programs. Like with most business activities, who you know and how well you know them plays a role in getting grant funding.
You also should stay informed about which grant making agencies or organizations change important personnel or grant fund requirements. That way, you won’t depend on getting grants that you no longer have access to and can plan properly for your future grant funding needs.
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Wow, this article is fastidious, my sister is analyzing these
things, so I am going to inform her.
We’re glad that you found this article helpful!
Hi, my name is Angela and my vision is to open my own adult home. I’m located in Va. I need a startup grant. Any suggestions as to which grant would be suitable for my business? Patiently waiting for a reply. Thanks in advance
You should reach out to Virginia’s Small Business Development Center in Fairfax. They have people on staff who can direct you to localized funding. Their services are free.
https://www.virginiasbdc.org/
Hi, my sister and I are going into business together. She has been a housekeeper for 35 years and is looking to expanding to some handyman repairs as well. Native American female owned and operated. Any advice? Located in California.
Here’s a great list of grants for minority/female owned small businesses in California.
https://www.womenandminoritybusiness.org/california-grants-and-loans-for-minority-and-women-owned-businesses/
Hello, I am trying to start my body contouring business. I have purchase most of my supplies and machines but I need a grant to start the business, lease a studio and buy my supplies and pay for marketing my business. I need a startup grant. Can you help me find the right grant for my business? Thank you
It would be great if we could all get free money in the form of grants whenever we want to start a business! Unfortunately that’s not going to be so easy – or every startup would apply for one. You can try Googling for grants in your city/region. If you’re a minority or female owned business you may try searching for those too. But don’t get your hopes up. Most startups get funded through family, credit cards and savings.
Yes I’m a general contractor registered with the state of Ohio and I need a grant to take my company to another level. I need the money to purchase equipment. Can you send me a link that can help with an SBA grant. Thank you.
Hi Fredrick, thanks for reaching out! You can find more information on SBA grants here: https://www.sba.gov/funding-programs/grants
I am a disabled American. I want to somehow contribute to society again. I have developed a plan to start a company that sells and repairs Grand Father Clocks of all varieties. I have already started to build inventory and advertise. I need to take this to the next level which is a store front, because of my income status, I have limited funds to fund a complete start up to include a specialty shipping company for the clocks. What help is out there for me to help get my feet back on the ground.
I would start with the Small Business Administration. There’s a nice summary of their activities supporting disabled entrepreneurs here: https://www.sba.gov/blog/sba-helps-people-disabilities-access-american-dream
I am an Owner/operator but I need help with purchasing my equipment (truck/trailer). Can you send me a link to apply for a SBA grant/loan? I have tried this some years ago and a company called Lendio contacted me. I wasn’t sure if they were legit, but would rather go through SBA and not an outside partner. Any information will be greatly appreciative.
Thanks for the comment! Check out this podcast/article where we interviewed the CEO of Lendio on grants/loans for small business owners. You’ll find a link where you can apply.
https://sba.thehartford.com/media/podcasts/next-round-of-ppp/
Hello,
I am interested in getting information on small business grants or loans for minority women that own small businesses. I opened a small trucking company on October 1, 2021. I currently have three employees(drivers). I am paying for half of the cost of their Class A CDL. Unfortunately, am also finding out that I will soon likely blow through my cash reserves, paying insurance, fuel, and payroll for my drivers. I am glad that I found this posting. I will use this link to get some MUCH needed information. I hope everything is working out for you Rick, best of luck to you! Take care.
Sherrell
Thank you for reaching out! SBA.gov has good resources you can check out:
https://www.sba.gov/business-guide/grow-your-business/minority-owned-businesses
https://www.sba.gov/business-guide/grow-your-business/women-owned-businesses
You can also check out these websites for grants:
https://www.grants.gov/
https://www.mbda.gov/?mpdid=17d2415dc9b236-03a1c71b425252-5b4e2418-1fa400-17d2415dc9c308&source=https://www.nerdwallet.com/article/small-business/small-business-grants-minorities
Any information on getting a startup business grant for a restaurant would be helpful and greatly appreciated. Thank you in advance.
Please advise
Apply for a Restaurant Revitalization Fund grant from the SBA here:
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund
Please Sir/Ma l really need this grant to help myself out of poverty and l also need money for daily income
Thanks for reaching out! You can apply to grants at these sites:
https://www.sbir.gov/about
https://www.nih.gov/about-nih/what-we-do/get-involved-nih/small-business-opportunities
https://www.rd.usda.gov/programs-services/rural-business-development-grants
https://www.grants.gov/
Hello, my husband and I need a loan to open a small business in Shelbyville TN. We would like to open a custom car audio store with accessories. There isn’t one in this town at this time and feel confident it would be a success. We are hoping to receive a small business loan to start the business.
Hi Andrea, thanks for reaching out! You can find information on small business loans on SBA.gov, here: https://www.sba.gov/funding-programs/loans
Thank very much sir/ma, this information will really be helpful to me.
We’re happy to help! Thanks for the comment!
Any information would be a help am looking for information on getting a grant to open a veterans home and senior home.