Small business grants are funds a business receives — typically for a specific purpose — that don’t need to be repaid. Small businesses in need of funding should consider applying for grants before traditional loans.
The application process for grants can be time-consuming and competitive. Small business grants can be scarce and difficult to get. This guide serves as a resource to learn where to search for grant opportunities and figure out what you need to be successful when applying for grants for your small business.
The difference between a grant and business loan is that grants don’t come with interest or repayment terms. Loan borrowers usually have the freedom to spend funds however they choose, while grant recipients typically must follow spending guidelines.
Most business grants are designed for specific types of companies or for those that meet certain requirements. For example, grants can go to companies that conduct medical research, work to advance a particular innovation or support underserved groups.
Grants for small businesses are available from a variety of sources, both private and public. Companies and financial institutions — as well as foundations and federal and state government agencies — sponsor grant programs for businesses.
There are resources online that can point you to organizations offering grants, including private and government grants for small business owners. You can search for opportunities in your local area or apply for national grant programs. The following sites compile available grants from across the country:
First, you’ll need to complete any required registrations, which could take some time. Organizations may require grant recipients to have certain registrations, including:
• An Employer Identification Number
• A DUNS number
• Registration on online platforms such as Grants.gov or the U.S. government System for Award Management
• SBA accreditation for certified small businesses or certified woman-owned businesses
Next, it’s time to start writing your small business grant application.
• Expect some straightforward questions, as well as open-ended ones that require longer responses
• Outline what you plan to write, making sure it relates to the points the application asks you to address
• Consider providing in-depth summaries of your local area or market situation
• Focus on how the money awarded would be applied to better your business and your community
After submitting your grant proposal, you may want to follow up with grant officers. Make sure you’ve answered all their questions and they know as much about your company as possible.
Many small businesses choose to hire a grant writer to take on the process for them. In some cases, it can be worth the expense to have a professional working on your side to help navigate a potentially challenging process. Consider hiring someone who knows the small business grants landscape. You can learn from their expertise and take on writing your own small business grant proposals in the future if you choose.
Be thorough
Provide all the information requested, but respect length guidelines. If necessary, include supplemental documents.Use citations and include supporting documentation
Back up every claim with facts and data.Ask questions if you're unclear about anything
Don’t make assumptions.Don’t simply copy and paste
Make sure that everything you submit is tailored for each grant opportunity.Follow the specifications listed
This includes font size, margin allotment, page limits, binder specifications, deadlines and preferred formatting. These details may seem trivial but could get all your hard work disqualified.Be realistic with budgeting
Talk with similar businesses and thoroughly research costs.Try not to submit your proposal at the last minute
Reviewers might get the impression that your company is disorganized and fails to plan ahead.Check to find previous grant winners
This would give you a good sense of what the organization is looking for and the types of proposals that are successful.Don’t be afraid to admit what you don’t know
If you can’t afford a grant writer, check out a book on grant writing from the library or invest in an online course that can teach you the basics.Small businesses are rarely eligible for federal grant funding, but certain businesses — especially those in high-tech fields and research and development — might be able to find federal government small business grants. Federal agencies offering business grants include:
Head over to Grants.gov to browse the searchable database of grants currently available from various agencies. You can search specifically for “small business” to find grants that are open. The Grants Learning Center includes a Grants 101 page and a listing of all the grant-making agencies.
In addition to federal grants, federal agencies and other organizations host a variety of contests that offer prize money for innovative solutions and ideas. You can search for these at Challenge.gov.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs: The SBA administers these two grant-funding programs for high-tech innovation. These programs provide seed grants through federal agencies to small businesses engaged in scientific research and development. To apply for the STTR or SBIR programs, check out its eligibility criteria.
Program for Investment in Micro-Entrepreneurs (PRIME): This SBA program offers loans and grants to low-income entrepreneurs who struggle to gain access to capital due to lack of training and education. There are grants available for technical assistance and capacity building ($50,000 minimum), research and development (no minimum) and discretionary purposes (no minimum). Recipients could be awarded a maximum of $250,000 in a given fiscal year.
State-level grants for small business are often designed to address particular social and economic concerns for that state. They are easier to get than federal grants, partly due to the fact that some of the federal funding is funneled to recipients through state agencies. Some might offer matching grants, which means applicants must match the funding level to receive the grant.
Here are some examples of state business grants or organizations that offer them:
To find available business grants in each state, visit the State and Territory Business Resources database at USA.gov and choose your state or territory from the drop-down menu.
Each page has an “access financing” section, where government-sponsored grants are listed. These links will lead you to each state’s official websites aimed at local businesses, where you can find more information about state resources.
Cities, towns and local nonprofits might have grant funding available for small businesses, especially those that assist the community or improve local quality of life. To track down these opportunities, you’ll need to do your own research in your local area, both online and in person.
Visit your municipal website and talk to local officials who might know where to find grant opportunities. Here are some local government business grant programs:
Check out these private business grants and determine if you are a good candidate for any: