Has someone told you that all you need to do to get extra cash for your business is apply for small business grants, startup business grants, federal government grants, or U.S. Small Business Administration grants?
Have they made it seem like a quick online search about "how to start your own business with no money" will pay off with tens of thousands of dollars? Unfortunately, it’s not that easy.
When you dig beneath the surface, many of the grants that are advertised online for businesses are no longer being offered, require that you be a nonprofit, are for very small amounts, or are for a narrow group of people.
That doesn’t mean that it’s impossible to apply for and receive a small business grant that you’ll never have to repay, but you shouldn’t be planning on funding your entire business that way.
That said, it’s not impossible to win small business grants or startup business grants, and many businesses are able to get a small business grant that helps them significantly. Whether or not you succeed will most likely depend on what kind of business you’re starting, where you’re starting it, and a number of other factors.
Small Business Grants Search Tool
Instantly view small business grants using our search tool.
Easily select your desired grant amount and eligibility requirements to compare opportunities that meet your selected criteria.
What to Know About Small Business Grants
Small business grants are sometimes only for specific groups of people like women, minorities, veterans, or young business owners. If you fit into those groups, that could increase your likelihood of getting a business grant. But you could still qualify for one and win one even if you don’t.
While many small business grants or startup business grants are open to people across the country, there are also some business grants that are location-specific. For information on these, you should check with your state or local small business support center or the local chamber of commerce.
One thing to remember is that applying for grants will be time-consuming, and there is no guarantee that your application will succeed. You also often have to wait a long time before you find out whether you won the grant or not, so this isn’t a solution to short-term needs. In fact, if you’re waiting on a grant to expand your business, your business could actually suffer.
Also, many business grants aren’t for a lot of money, starting around $500-$1,000 for micro-grants, and up to $100,000. Federal grants can go as high as $5 million, but they tend to only be accessible to businesses that are more established and not to new startups, as sometimes getting these funds requires a commitment of matching funds. Also, these larger amounts tend to be focused on companies that participate in research and innovation, something your company might not be doing.
Small business grants are much better than taking out small business loans, which require repayment, overtime, and interest. These loans will likely offer more opportunity for funding, but will certainly add more risk as well. That being said, you should wait to see what kind of funding your business can receive from grants before considering a small business loan.
Are you wondering how to research and apply for grants that are right for you? We break down the things you need to know – like what kind of grants are out there, how to find them, and how to successfully apply for small business grants.
What You Can and Can't Get a Grant For
Depending on the grant, there are certain things that you may or may not be able to use it to fund. Most grants want to fund something tangible that will help you grow your business. For that reason, they might be more likely to fund or more likely to approve applications that are looking to buy a new piece of equipment or hire a new staff member. In fact, some grants are specifically aimed at helping you hire new staff – especially local grants that are meant to attract new businesses to their communities.
You’ll have a harder time getting seed money for your early-stage startup from a granting program, as startups often fail. Grantors tend to prefer to fund companies that are slightly further along in their growth. However, there are grants that do focus on startups like the Visa Everywhere Initiative and the North Carolina IDEA Seed Grant.
If you’re looking for a grant to cover hardship or cashflow issues, that is one of the hardest types of grants to find. Grantors want to give money that will help companies thrive. So if your company is currently struggling, that doesn’t inspire much confidence. Also, funding for these kinds of uses doesn’t necessarily allow your company to grow – it could just allow it to maintain its current state, so grantors are less likely to focus their money this way.
How to Find Grant Opportunities
When it comes to finding reputable small business grants, it’s important to figure out where to look. Unfortunately, much of the information that you’ll find online about the "best business grants" is often outdated, as many prominent business grant programs have stopped giving out grants in recent years.
While online grant lists are good resources to use to give you some leads, they’re usually the same couple of grants and broken links listed on all the pages. Luckily for you, we have created a Small Business Grants Search Tool that shows current opportunities available for business owners.
Many states and cities also have small business development offices or departments. This is also a great place to go in person or online to find out more about small business grants in your area. They’ll also often know about state and federal business grants as well. State grants can be found listed here, also.
Finally, another place to go to get information about small business grants is your local chamber of commerce. They might keep a list of local grants for their members.
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Federal Government Grants for Small Business
Ever heard of all that federal grant money that’s available to small businesses? While there are some grants available, most of the business grant programs that the federal government runs tend to be suited to larger companies than small startups or very small businesses.
Federal programs are primarily focused on research and innovation rather than on buying new equipment or hiring new staff members. Here are some examples of federal small business grants.
The Small Business Technology Transfer Program
Small Business Technology Transfer Program (SBTT) allows you to collaborate with the research and development department of a federal agency to further joint venture research opportunities that have commercial applications. The goal is to help federal departments bridge the gap between doing research and commercializing that research.
By law, federal departments that have research and development budgets that are over $1 billion need to set aside 0.3 percent of those budgets for the SBTT program. The agencies decide on priority areas and approve proposals.
Currently, the following agencies participate: the Department of Defense, the Department of Energy, the Department of Health and Human Services, the National Aeronautics and Space Administration, and the National Science Foundation.
The SBTT program provides two types of grants. The first is a Phase I grant that is no more than $150,000 for one year. This is to study feasibility, technical merit, and commercial potential. Phase II grants are for much more but do not exceed $1 million over two years.
The eligibility requirements for these grants will vary from agency to agency, but it’s important to note that SBTT grants are extremely competitive.
The Small Business Innovation Research Program
The Small Business Innovation Research Program (SBIR) encourages small businesses to work with federal research and development departments in order commercialize research, particularly on work that is connected to technological innovation. The goals of the program are to stimulate technological innovation, meet federal research needs, encourage entrepreneurship by women and other minorities, and increase private sector involvement in the commercialization of federal research.
By law, federal agencies whose research and development budgets exceed $100 million are required to put aside 3.2 percent of their budgets for these programs. These departments include: the Department of Agriculture, the Department of Commerce – National Institute of Standards and Technology, The Department of Commerce – National Oceanic and Atmospheric Administration, the Department of Defense, the Department of Education, the Department of Energy, the Department of Health and Human Services, the Department of Homeland Security, the Department of Transportation, the Environmental Protection Agency, the National Aeronautics and Space Administration, and the National Science Foundation.
The program has three phases of funding. The first phase is to determine feasibility and commercial potential. and provides businesses with up to $150,000 over six months. Phase II funding can be for up to $1 million over two years, and Phase III funding does not come directly from the SBIR program, but from other federal sources. What kinds of businesses are eligible will vary from agency to agency, but all grant competitions under the SBIR program are extremely competitive.
Value Added Producer Grant
The Value Added Producer Grant is a program offered through the United States Department of Agriculture and Rural Development. These grants are for agricultural producers who decide that they want to start processing or marketing new projects. The goal of the program is to help agricultural businesses create and market new products.
They give out a total of $18 million in grants that range from $75,000 for planning grants to $250,000 for working capital grants. Grantees are required to come up with 50 percent of project costs themselves.
They prioritize giving grants to small- or medium-sized farms or ranches that are either farmer- or cooperative-owned. The competition for these grants is typically quite high, and it can be difficult to win them.
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State Government Grants for Small Business
When it comes to state grants, what kinds of grants are available varies greatly depending on what state you live in and what its economic priorities are. State grants are smaller than federal grants and often require that you provide matching funds.
It can be difficult for small businesses to access state-sponsored grants since the matching money requirement can be difficult for some small businesses with cash flow issues to meet. While we are listing a few state grants below, you can also search for what is offered from your own state here.
Colorado Advanced Industries Export Grant
Live in Colorado and want to export your products? Lucky for you, your state wants to help you do that. They provide support for small- to medium-sized businesses by giving out grants to help them offset the costs of international business development and marketing.
The grants can be as much as $15,000 to reimburse things like export trips, trade show costs, and other activities. If you’re approved, you pay out of pocket and then get reimbursed for 50 percent of your costs.
These funds are only available for advanced industries that include advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, infrastructure, engineering, and information technology.
Idaho State Trade Expansion Program
There are a number of states that get funding under the STEP program, which is administered by the SBA. These states then use the funds to increase the number of small businesses that are able to export and the value of those exports. Each state sets up their program differently, so it’s important to check to see if your state has a program and what kind of grants they offer.
In Idaho, they have two kinds of STEP funding: financial assistance awards and trade show participant awards. The financial assistance awards give companies money to market their products internationally. They can get anywhere from $3,000 to $15,000 but must match those funds with 35 percent cash. Companies can get more than one award, but the total amount any one company can get is $15,000.
The second type of grant specifically covers the costs of trade shows for your company. This covers the cost of booth space, a trade show pavilion, and airfare and lodging for one employee from your company. The state decides which trade shows are eligible, and you apply to participate. These grants can be very competitive and hard to get.
North Carolina IDEA Seed Grant
Looking for a grant for your startup? North Carolina offers grants specifically aimed at startup entrepreneurs. This seed money is meant to help North Carolina companies validate their ideas and to scale faster in order to both attract more customers and additional investments.
The program has given out over $5 million in grant funding and 70 percent of those companies are still around and currently employ 1,000 people. The goal of the North Carolina program is therefore to make it easier for startups to open businesses in North Carolina, employ North Carolina residents, and thrive.
The Seed Grants are for up to $50,000 and meant to reduce risks for early-stage companies with significant potential. They solicit applications twice per year and five or six companies will get grants each cycle. The money is then released over six to 12 months as your business reaches agreed-upon milestones.
Companies must be based in North Carolina and agree to stay in the state for two years after receiving funding. They specifically look for companies that have proprietary intellectual property or other competitive advantages. Qualified companies usually fall under a list of certain types of companies that include industries like digital media, consumer products, and healthcare IT. These grants are very competitive.
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Local Grants for Small Business
Don’t qualify for any federal or state small business grants? Then keep an eye out for what’s offered closer to home. Many cities or towns will offer small business grant programs to help encourage and boost the local economy. Sometimes they are looking to support companies that show the potential for significant expansion, and other times they are looking to support businesses that directly benefit the local community.
The best way to find these types of grants is to connect with a business development center or office if your city has one. The chamber of commerce or city hall might also be able to direct you to these kinds of resources.
Here are some examples of the types of grants you might find:
Cleveland Department of Economic Development
Cleveland offers a bunch of different grant and loan programs to help companies expand or relocate their business to Cleveland. These include a tax abatement program, a job creation incentive grant, a technology business grant, a vacant property initiative, a neighborhood retail assistance program, an economic development loan program, an equipment loan program, a minority construction loan program, and a storefront renovation loan program, among others.
The value of these grants varies depending on the program. For example, the job creation incentive program gives companies grants for up to 0.5 percent of new payroll for up to three years. It allows them to also qualify for a $5,000 moving assistance grant.
Whether you qualify will depend on the particular program. These types of grants can often be easier to win since there are fewer applicants and since the cities often want to provide as many grants as possible in order to increase economic activity and job creation in their region.
Ben Franklin Technology Partners, Big Idea Contest
The Ben Franklin Big Idea Contest is a grant program for small businesses in Central and Northern Pennsylvania. This program is run by the Pennsylvania Department of Community and Economic Development and funded by the Ben Franklin Technology Development Authority. The program provides funding for those who are working on developing or commercializing new innovative products, services, or software. As part of the program, winners get up to $50,000 in cash, a six-month membership at a tech accelerator that includes working space, and access to education and consulting.
To qualify, your business has to have revenues below $500,000 and be located in the right geographical region. To get the money, you need to do a five-minute presentation and submit a full application. Competition is fierce, and only two people win the grant each year.
Chicago Small Business Improvement Fund
Grants are given out for all kinds of reasons. The Chicago Small Business Improvement Fund gives out money to help those who own industrial or commercial property repair or remodel their properties for their own use or on behalf of their commercial tenants.
The grants cover up to 50 percent of all the renovation costs with a maximum grant amount of $150,000. The goal is to help industrial companies expand and create employment opportunities for Chicago residents.
Types of renovations that would qualify include things like new windows, floors, or roof, sign removal or replacement, new heating or ventilation systems, and accommodations for disabled customers or workers.
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Nonprofit Grants for Small Business
There are also nonprofit organizations that are giving to small businesses. Some of these nonprofits are affiliated with corporate partners and others are just nonprofit organizations that were created to help businesses succeed.
While there aren’t a lot of national nonprofit organizations that provide small business grants, there are likely a number of regional organizations that will provide them – so be sure to do your research to find them.
National Association for the Self-Employed (NASE)
NASE is a nonprofit membership association that brings together those who are self-employed in order to negotiate better rates on things like health insurance and advocate for people who are self-employed.
They also offer grants of up to $4,000 each to small businesses. Grants can be used for a variety of different business needs such as to buy computers or farm equipment, to hire additional staff, for marketing materials, or website creation.
In order to apply, you have to be a member of NASE. But while that will limit the number of people who apply, the fact that there are few guidelines on what the money can be used for means that likely most members will apply for the grant. For that reason, expect it to be very competitive.
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Corporate Grants for Small Business
Many corporations provide grants to small businesses for a variety of reasons. For some, like the company Eileen Fisher, it is for the good PR the company gets for supporting women-owned businesses. For others like FedEx, it is an attempt to get small businesses to consider FedEx for their shipping needs and to promote company loyalty.
When you’re applying for a corporate grant, it’s important that you understand what the company is trying to do so that you can position your application accordingly. For example, if they want to support entrepreneurs who have compelling stories of the struggle that they went through to start their business, you will want to emphasize that aspect of your story. If they want to give grants to businesses that have achieved significant success milestones, then you’ll want to emphasize that aspect of your story.
The downsides of corporate grants are that many are open across the country and are well-publicized with limited budgets. This means that these grant competitions are likely the most difficult to win.
Eileen Fisher Women-Owned Business Grant Program
Eileen Fisher is a company that designs clothing for women. The designer is a woman who is a successful entrepreneur and who wants to support other female entrepreneurs. The grant program supports small businesses that are at least 51 percent owned by women.
This grant program focuses on socially conscious companies that are focused on sustainability and supporting the community. If your company is doing something innovative, that will also increase your chances of winning an Eileen Fisher Women-Owned Business Grant.
The grants are worth $10,000 or more. And to be eligible, your company will have had to be in operation for three years and have revenues under $1 million.
FedEx Small Business Grant
Most small businesses have to send things in the mail and FedEx knows this. By offering this program, they are hoping to get small businesses to consider them as a service provider. The FedEx Small Business Grant is worth $25,000 and is meant to help small businesses build and grow their business. They give out 10 grants per year.
In order to apply, you have to create a video. For this reason, FedEx tends to give out their grants to companies that have really compelling personal and business stories. Before you apply, try to watch other videos and research past winners so that you know how best to position your business. Because of the high-profile nature of the program, it is very competitive.
Visa Everywhere Initiative
Visa wants to support global innovation, so it launched a program that provides grant funding to startups that aim to solve problems within the payments and commerce industry. The goal is to help new innovative ideas gain traction and help founders grow their businesses in order to make their visionary solutions for the future possible. The program was launched in 2015 and quickly expanded globally. In total, 131 finalists and 36 winners have been selected since 2015.
Each year, they focus on specific challenges facing the industry such as expanding access to digital payments for small and medium businesses or driving digital innovation through voice, messaging, and artificial intelligence. They provide $50,000 to winners. Because of its global reach, it is incredibly competitive.
Lending Tree Small Business Grants
Lending Tree is an online loan marketplace that also offers a $50,000 small business grant. They provide their grant to companies that are run by passionate entrepreneurs, have a growth mindset and are also focused on community enrichment.
Because it is a relatively new grant, many people might not yet know about it. Therefore, you might have a better chance of winning the grant than another more well-known and longstanding award.
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Minority Grants for Small Business
When it comes to small business grants that are specifically aimed at minority business owners, there are a limited number of options when you’re looking at grants that are open to people across the country. Here are some grants that are available to women, Native American people, and others.
The Amber Grant was Launched in 1998 by WomensNet. It was created to honor a woman named Amber who died before she was able to reach her entrepreneurial goals.
In her memory, the organization gives a winning female entrepreneur $1,000 each month. Those who win these monthly awards are automatically included in the competition for an annual grant of $10,000.
The competition for this grant is quite fierce, and the amount awarded is relatively small. But grants also work to help your business get attention and publicity, so it might make sense for you to apply.
The Halstead Grant
Are you a woman business owner who makes and sells jewelry? If so, you can receive up to a $7,500 grant and a $1,000 gift certificate to Halstead. The award is meant to support emerging jewelry designers. The finalists also receive support with the top five receiving $500 each and next top five receiving $250. The winner also gets to go to Arizona to accept the grant.
While the contest is focused on design, they also take into account the business case for the jewelry business in question as they want to support designers to grow their businesses. The contest is fairly niche, so if you are a jewelry designer who qualifies, you should enter.
Minerals and Mining on Indian Lands
If you run a company that is owned by Native American individuals or tribes, you could be eligible to get a grant to help you start a mineral exploration or mining company on Indian lands.
These grants are given out by the U.S. Department of the Interior and can provide grant funding from $10,000 to $250,000 (but $75,000 on average) toward mining and mineral exploration, including covering things like, “the inventory, assessment, promotion, and marketing of both renewable and nonrenewable energy and mineral resources on Indian lands.”
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Checklist to Help You Apply for a Small Business Grant
When it comes to applying for a business grant, there are a few things that are pretty common, even though each application is different. Generally, they’ll want the following:
- A business plan: It’s time to create or update your business plan. Most business grant programs will want to see a compelling business plan that shows you have put serious time and thought into your business and researched your potential market. Don’t make claims that are unlikely to come true – like your belief that you can capture 50 percent market share one year after launch.
- Personal information: Most grant programs will also want to know something about the founders. The most common information they’ll require is your personal and business contact information – so have that ready. But they’ll also want to know things like your professional background, resume, bio, and what groups you might identify with – especially if the grant is looking to support minority business owners.
- A budget: You’re asking someone for money, and the first thing that they’ll want to know is how you’re going to use it. Have a well thought out budget that clearly shows how you’ll spend the money.
- A compelling case for your business: Do you have an elevator pitch? If not, it’s time to develop one. You’ll want to make a concise and compelling case for why they should give you the grant. Make sure to look at the types of businesses they’re hoping to award funds to and use that info to craft your case.
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How to Increase Your Odds of Getting a Small Business Grant
You don’t want to spend hours and hours working on a small business grant when you have a small likelihood of success, do you? That’s why you should know what to look for to better understand what your chances are of winning and what you can do to improve those chances.
Make Sure You're Eligible
The first thing that you’ll want to do is easy – make sure you’re eligible. Read all the fine print before you start working on the grant. Maybe you live in the right state and you’re the right age, but your spouse works for the company giving out the grant and that means that you can’t get it.
Or maybe you didn’t realize that the grant was only for people who are of a certain age or gender. Don’t waste your time—check the requirements and eligibility before you start working on that grant.
Know the Competition
The next thing you’ll want to do is try to figure out how likely you will be to win a grant so that you don’t spend hours and hours working on an application if you don’t have a chance. One way to do this is to look closely at past winners. If every past winner’s business was much more successful and bigger than yours, then that’s a good indication your business might not be able to win until you grow a little bit more. Also, if the competition says that it’s open to all industries, but the grants tend to go toward a particular industry, it might mean you are less likely to win if you’re not in that industry.
Finally, how likely you are to win a small business grant also depends on how many people are likely to apply for it. Some grantors will list how many people applied last year on their website. If they do not, however, you can assume that the fewer restrictions there are on applicants the more people will apply.
If a competition is open on a national level and anyone with a business can apply no matter their industry, it’s likely that competition will get many more applicants than a competition that’s focused on one narrow geographical area and one group of business owners.
Make a Compelling Case
Ultimately, a business grant application involves answering one question—why should they give you the money? Everything on your application should be designed to strengthen your answer.
But before you go writing about how great your business is, you want to make sure you know what kinds of businesses the grantor is hoping to support. Many business grantors have websites where they talk about their grant program. What they write here is important and should help you shape your application. For example, if their site says they want to help support sustainable businesses led by young, visionary leaders, your application should make the case why your business is sustainable and you’re a young, visionary leader.
While you don’t want to make anything up that isn’t true, you can contextualize what you have done and your success in the terms that they use on their own site. This will mean that they’re more likely to see how you fit into the types of businesses that they’re hoping to support.
Include Letters of Support
Many business grant applications require that you include letters of support along with your application. It’s important to choose the right referees. You want people who are high profile if possible, but who know you well enough to write a compelling reference letter.
One way to help them do so is to give them a copy of your resume and business plan when they are writing the letter and to let them know what the grantor is looking to reward. That way, they can incorporate information about your business and yourself and make a case why you’re the best fit.
Submit a Professional Application
Making sure your application for a grant looks professional is key. But if you’ve never submitted a business grant application before, how do you know it’s professional? One way to ensure your application is as strong as possible is to look for examples of other successful grant applications from other business owners or search online for one. This will give you a template that you can use as a sample to base your application on.
Another option is to hire a grant-writer to put the application together or to provide guidance on your application. While this can cost several hundred dollars or more, you might decide that your chances of winning the grant are good and you want to do everything that you can to ensure you’re successful.
If you can’t afford a grant writer, you could also ask one of your business mentors or board members to take a look at the grant application. Their feedback and insight could make a real difference.
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Steer Clear of Scams Targeting Small Business Owners
When it comes to small business grants, you’re going to want to make sure that you’re aware of potential scams. Scams always try to prey on those who are desperate – and business owners who are looking for grants are doing so because they desperately need free money to keep their businesses dreams alive. Here are some scams to watch out for.
Grants That Charge an Application Fee
If a grant is charging you to apply, then it’s not really a grant and it’s likely a scam. Avoid grants that have application fees as few reputable grants charge them.
Grants That Require a Deposit From You
Some scammers will contact you to tell you that you’re eligible for or have won a big government grant and all you need to do to get $100,000 or $50,000 is pay them $5,000 upfront. It sounds too good to be true, right? That’s because it is. Do not give them your money.
Grants That Require You to Pay Them for Work
Scammers are crafty and some will say that they have money waiting for you, but that your company isn’t set up properly or you need to fill out some forms in order to be qualified. They will then offer to do this for you for a fee. Sometimes they’ll even tell you that you need to incorporate as a nonprofit or in another state. But after you pay them for the work, they disappear, and you’ll never see that money again.
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