Small Business Grant – How to Get Free Funding for Your Business or Start Up


how to get a small business grant

Ask any business owner and they’ll confirm – access to capital is a cornerstone for a thriving business. Grants, business loans, and other funding options such as credit and business insurance provide an especially attractive means for businesses in America to secure the necessary capital. Securing a small business grant can significantly impact a small business’s growth trajectory, offering a financial boost without the obligation of repayment.

If you’re interested in exploring this option further, this article will offer insightful guidance on getting a small business grant.

What is a Small Business Grant?

A small business grant is a sum of money given to an entrepreneur or business owner to support their business’s growth, development, or specific project. Grants are one of the main small business funding options.

Small business grants enable your company to obtain funding without having to pay it back. This is invaluable for small businesses.

Unlike loans, grants do not need to be repaid, making them highly sought after for small businesses looking to expand, innovate, or improve without the burden of additional debt.

These grants can come from various sources, including government agencies, private corporations, and nonprofit organizations, each with its own set of eligibility requirements and application processes.

Different types of small business grants may include:

  • Federal Government Grants: Federal Government Grants are a cornerstone of support for small businesses, with organizations like the Economic Development Administration providing funding for sectors such as technology, agriculture, and environmental conservation. These grants can come from various sources, including government agencies, private corporations, nonprofit organizations, and foundations, each with its own set of eligibility requirements and application processes.
  • State and Local Government Grants: State and Local Government Grants support small businesses that contribute to local economies, enhance community development, and create jobs.
  • Corporate Grants: Companies like FedEx offer funding to support small businesses, often in specific industries or for particular types of business owners, such as minorities, women, or veterans. FedEx annually offers a small business grant contest, providing an excellent funding opportunity for innovative new businesses/startups. Corporate grants, such as those offered by companies like FedEx,  Wells Fargo, Walmart, Etsy, Amazon, and initiatives like the Tory Burch Foundation, provide additional funding opportunities for small businesses.
  • Research and Development Grants: Research and Development Grants: These federal and corporate grants, including those from the Environmental Protection Agency (EPA), support businesses undertaking innovative projects in technology, science, and environmental initiatives.
  • Nonprofit Organizations and Foundations: Offer grants to support businesses with a social, environmental, or community-focused mission.
  • Emergency Gants: In times of crisis, seek out emergency relief grants and loans designed to assist businesses in recovering from unforeseen disasters or economic downturns. You could also consider crowdfunding for crisis situations.
  • Specialty Grants: These grants are targeted towards business enterprises in specific fields like agriculture, natural resource management, education, and healthcare, providing support for innovation and expansion in these sectors. Some grants even target minority-owned (look into the MBDA), veteran-owned, and women-owned businesses (e.g., the Amber Grant).
  • Contest and Competition Grants: These grants are awarded to businesses that win or place highly in competitions organized by corporations, industry groups, or nonprofit organizations. The competitions often require a pitch or business plan.

These are just a few examples. There are more than 20 types of grants available that may benefit various small businesses. “In addition to exploring small business grants, entrepreneurs should consider a broad spectrum of financing options, including traditional loans, credit cards, Small Business Administration (SBA) loans, and lines of credit, as viable options for funding. Traditional loans, credit cards, and Small Business Administration (SBA) loans offer alternative pathways to funding that can complement or serve as viable substitutes for grant money.

Additionally, seeking out investors can provide another avenue for obtaining investment capital, complementing grants and traditional funding options.

How to Apply for Small Business Grants for Your Start Up or Existing Business

Thinking about securing a grant to help cover operational costs for your existing small business or start-up can initially seem overwhelming. The application process for a small business grant may appear complex and intimidating. For entrepreneurs wondering how to get a small business grant, the key is thorough preparation and research to identify the grants most applicable to their business needs.

When applying for a small business grant, make sure to read the instructions and requirements carefully to ensure your best chance of success.

However, it doesn’t have to be an insurmountable task. We have simplified this process into three easy-to-follow steps for applying for a small business grant. Stay tuned as we delve into these crucial steps:

  • Do Your Research: Explore various funding options, including small business grants, loans, and research and development opportunities, to find the best fit for your business. Making the most of comprehensive grant databases and staying updated with the latest information is crucial in this process. The SBA’s website and the Small Business Innovation Research (SBIR) program are excellent starting points for finding grants tailored to research and technology transfer.
  • Look into Eligibility Requirements: Many grant programs have eligibility requirements to ensure funds go to the businesses with the highest need or greatest impact. Each application generally outlines these and may include business size or ownership factors. We outline even more about eligibility requirements later in this post.
  • Prepare a Solid Business Plan: Almost all grant applications will require a comprehensive business plan. This document should articulate your business’s mission, financial projections, marketing strategy, and why the grant is essential for your growth. Tailor it to highlight aspects most relevant to the grant’s purpose.
  • Put Together a Strong Application: When you’re ready to apply for a small business grant, make sure you put together a strong application. Your application should include information about your business plan, your financial situation, and why you deserve the grant.
  • Follow Specific Program Instructions: Many grant programs allow you to submit application materials online. However, others may require you to submit hard copies of certain documents or even attend in-person sessions. Additionally, many programs have set deadlines and other rules. So be sure to follow the outlined instructions for each specific program closely.
  • Follow Up with the Funding Agency: Once you’ve submitted your application, make sure to follow up with the funding agency. This will show them that you’re serious about your business and give them an opportunity to ask any questions they may have.
  • Be Prepared to Pitch Your Business: When you’re meeting with potential funders, be prepared to answer questions about your business. They’ll want to know what your business does, how it makes money, and what your plans are for the future. Study your business plan and application materials before meeting with funders or contacting organizations offering grants.
  • Have a Contingency Plan: Even if you’ve done everything right, there’s always a chance that your application will be denied and you won’t receive grant funding. That’s why it’s important to have a contingency plan in place. Whether you plan to reapply for the grant or research other opportunities that support small businesses, make sure you have a plan for moving forward if your application is denied.

How to Find and Apply for Niche Small Business Grants in Your Industry

In addition to general grant programs that are available to a wide range of businesses, many industry groups and local organizations provide grant opportunities aimed at helping specific types of businesses.

Finding the right grants to apply for can be challenging, but these tips will get you started in the right direction.

This tailored opportunity can make some funding opportunities more accessible for niche businesses that have fallen through the cracks of other programs.

In addition to the tips above, here are some insights that can help you find and apply for these niche grants.

  • Connect with Industry Resources: Begin by diving deep into databases and resources that list grants for your industry. A thorough internet search can often uncover opportunities or resources you can monitor that may post grants in the future.
  • Local Opportunities: Don’t neglect local and state resources. Many local chambers of commerce, economic development organizations, and state departments offer grants tailored to businesses in their regions. This can be a more approachable avenue as there might be fewer applicants than national programs.
  • Network Actively: Join industry groups, attend seminars, or participate in webinars. Engaging with your industry community can unveil opportunities to learn how to get a small business grant from peers or mentors who have successfully secured grants before.
  • Seek Expertise: If unsure about how to get small business grants, consider hiring a grant writer or consultant. Their expertise can improve your chances of success, especially if you’re new to the grant application process.

Small Business Grant Funding Eligibility

Understanding the eligibility requirements for a small business grant is crucial. These criteria are often specific and can vary widely depending on the grantor. Here are key factors to consider:

  • Business Size and Type: Many grants specify the size of the business (like small or medium-sized) and the type (such as startups, minority-owned, women-owned).
  • Industry and Sector: Some grants, often facilitated by agencies like the Minority Business Development Agency, target specific industries or sectors, including those owned by minorities, to support their unique challenges and opportunities for growth.
  • Location: Geographic eligibility can be a factor, with certain grants available only to businesses in specific regions or communities. Additionally, business owners on a visa should investigate grants available for non-citizens, enhancing their ability to secure funding in America.
  • Purpose of the Grant: Grants often have a specific purpose, such as innovation, environmental impact, or community development.
  • Financial Health: A business’s financial health is crucial in determining its eligibility for various grants and funding opportunities. Proof of financial stability or need may be required. Ensuring your business has adequate business insurance is also crucial for demonstrating financial stability when applying for grants.
  • Compliance with Laws: Ensure your business complies with all relevant laws and regulations before applying for a grant for small business.
  • Documentation and Reporting: Be prepared to provide detailed business plans, financial records, and regular progress reports.

How to Use Small Business Grant Money Wisely

Many small business owners mistakenly view grants as ‘free money,’ but planning strategically for this financial support is crucial. However, this is far from reality. While it’s true that many organizations offer grants that don’t necessitate repayment, these grants often have specific terms attached.

Maximize the money obtained through a small business grant wisely to get the most benefit.

For instance, it might be stipulated that the grant is to be utilized for a distinct purpose, such as recruiting new employees, obtaining technical support, or investing in new equipment.

On top of that, grant recipients might be obligated to furnish detailed reports or documentation indicating how the funds were expended.

Consequently, it’s crucial to thoroughly contemplate how the grant money will be employed prior to accepting an award.

This kind of forward-thinking allows you to ensure the grant is utilized to propel your business forward while adhering to the grant-giving entity’s guidelines.

This might involve creating a strategic spending plan or consulting with a financial advisor to ensure your spending aligns with the grant’s purpose.

This kind of forward-thinking ensures the grant supports your business effectively, maintaining equity and avoiding unnecessary debt.

Small Business Grant FAQs

Our Frequently Asked Questions section covers common concerns about grant applications, eligibility, and the selection process.

Where can you find grants for small businesses?

Small businesses can locate entities that offer grants through various online databases.

These include grants.gov, which provides comprehensive information on federal grants, and the Small Business Administration’s website, which offers resources and links to potential grant and funding opportunities.

Other organizations, such as Small Business Development Centers (SBDCs), Women’s Business Centers (WBCs), some private corporations, and the National Association for the Self-Employed (NASE), also provide information about grant opportunities.

These resources can be invaluable when you’re exploring options for financing your business growth.

Additionally, it might prove beneficial to browse your state’s official website or the online portal of your local chamber of commerce. They often list local grants and funding programs that might be relevant to your business.

Can you get Small Business Administration grants for small businesses and new start ups?

The SBA does not typically provide grants directly to small business owners. However, they administer programs such as the Program for Investors in Microentrepreneurs (PRIME), which provides federal grants to organizations that support microenterprise development.

This can be a significant resource for small businesses that want to partner with these organizations or benefit from their services.

What happens if you don’t spend the grant money properly or if you go out of business?

In the unfortunate event that the grant money is not utilized properly, there can be significant repercussions. You may be liable to repay the entire grant amount as if it were a business loan.

This includes any federal government grants program. In addition, should your business cease to operate, you might be required to refund the grant money if you are unable to furnish documentation demonstrating how the grant was employed.

This highlights the importance of meticulous record-keeping and scrupulous adherence to the stipulated grant conditions.

Do Small Business Grants Have to Be Paid Back?

Grants, unlike loans, typically do not require recipients to repay the funds, making these programs an attractive financial support mechanism.

However, grants usually come with stipulations regarding how the money must be used, and recipients may be required to provide reports or evidence showing that the funds were used for the intended purposes.

What Small Business Grants Do I Qualify For?

As a business owner, the grants you qualify for can vary widely depending on several factors, including your industry, business size, location, and specific business goals or needs.

Common criteria that may influence your eligibility include the nature of your business (such as tech, agriculture, retail), your business’s contribution to economic development or innovation, and your own background (e.g., women, veterans, minorities).

Some grants are geared towards businesses operating in rural areas or those focused on environmental sustainability, research and development, or community service.

To identify relevant grants, consider your business’s unique attributes and needs and research federal, state, and local government grant programs and opportunities from private corporations and nonprofit organizations.

It’s also beneficial to check with local business associations and economic development centers, as they can provide personalized advice and information on grants for which your business might be eligible.

What is a Small Business Grant Writer?

A grant writer is a professional who specializes in researching, writing, and applying for grants on behalf of individuals, nonprofit organizations, educational institutions, or businesses. Their expertise lies in understanding the complex requirements and guidelines of grant proposals, crafting compelling narratives that align with the funding entity’s goals, and articulating the need for funding in a clear and persuasive manner.

Grant writers play a crucial role in securing financial support for projects, programs, or initiatives by effectively communicating how the proposed efforts will address specific issues, contribute to the community, or advance research and innovation. Their work involves writing and meticulous planning and coordination with the organization seeking the grant to ensure that the proposals meet all necessary criteria and deadlines.

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Kevin Ocasio Kevin Ocasio is a staff writer for Small Business Trends. He holds certifications in SEO, digital marketing, and content marketing. Kevin is also certified in Information Technology Technical Support Fundamentals.

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  1. This article provides valuable insights into securing small business grants, offering practical tips and strategies for entrepreneurs looking for financial support. From identifying eligibility criteria to crafting compelling grant proposals, it covers all steps to increase your chances of success. Whether you’re a startup or an established business, support grants can provide a significant boost to your growth. With clear guidance and actionable advice, this resource equips small business owners with the knowledge needed to guide the grant application process effectively.

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