Your complete guide to getting small business grants (U.S. Edition)

Securing free money through grants is an attractive prospect, but it’s essential to understand the associated costs. These aren't financial costs, but rather investments of your time and resources. You must dedicate time to finding grants you're eligible for, navigating the often lengthy application process, and adhering to strict spending rules.

Despite the time commitment, obtaining a small business grant can be a worthwhile endeavor, providing the capital needed to accelerate your business's growth. If you are seeking to inject funds into your operations, this guide compiles a variety of options to begin your search.

Small business grants represent funds awarded by an organization to a business for a predefined purpose. These grants support businesses at various stages, including startup, expansion, and research and development phases.

Unlike loans or credit cards, grants do not require repayment and won't impact your credit score. However, they come with specific conditions; the money must be used as stipulated by the provider. Failure to comply with these rules can result in penalties.

The main kinds of small business grants

There are two primary categories of grants available to small businesses: government and private. Government grants, which can be found at the federal and state levels, are often located through government databases. These databases, however, can sometimes be outdated or require a fee for access.

Corporations also offer small business grant programs. These private grants tend to have less stringent application requirements, though they often attract a higher number of applicants, increasing the competition for funding.

Another form of private funding comes from foundation grants. In this case, the grant money is provided by a charitable foundation rather than a corporation.

Unfortunately, no single, centralized database exists to search for every type of grant. To simplify your search, a curated list of top government and private grant databases is provided below, complete with direct links to help you get started.

Navigating the grant application process

The prospect of free funding is alluring, but the application process is designed to be rigorous, which can deter many business owners. Even with a smaller pool of applicants, the competition for each grant remains fierce.

To increase your chances of success, it’s crucial to approach the application with diligence and attention to detail. A well-prepared application can significantly improve your odds of securing funding.

Here are some key steps to follow:

• Verify Eligibility: Before you begin, carefully review the grant’s requirements. Do you meet the criteria, such as being a minority-owned business, focusing on environmental impact, or having been in operation for a specific number of years? Attempting to apply without meeting the qualifications will only waste your time.
• Complete the Application Thoroughly: Read through the entire application and provide accurate, complete information. An incomplete application is likely to be screened out. Adhere to all instructions precisely, including page limits and formatting guidelines.
• Connect with the Grant Officer: If possible, reach out to the grant officer to gain a better understanding of what the organization is looking for. Inquiring about their priorities, timing, and any constraints can provide valuable insights for your application.

Strategies for winning a grant

When you find a grant that aligns perfectly with your business, it is vital to make your application stand out from the competition. A generic submission is unlikely to capture the attention of the review committee.

One effective strategy is to connect with previous grant recipients. They can offer firsthand knowledge of what made their application successful, providing a template you can adapt for your own business.

A comprehensive and well-crafted business plan is a mandatory component of most grant applications. Your plan should clearly articulate why your company is poised for success, how the funding will be used to strengthen your operations, and how you will achieve the specific objectives outlined by the grant.

After submitting your application, a polite and non-intrusive follow-up with the grant officer is appropriate. You can inquire if they have any questions or if there is any additional information you can provide to support your submission.

A directory of federal grant opportunities

Federal agencies offer a range of grants to small businesses, particularly those in specific sectors like scientific research, technology, and conservation. These grants also support nonprofit organizations, educational institutions, and local governments. It's important to note that federal grants typically fund research and development rather than initial startup costs or operational expenses.

Grants.gov As the official portal for grants administered by U.S. government agencies, Grants.gov is a comprehensive resource. You can begin by searching for opportunities and using the "small businesses" filter. To view full eligibility details and apply, you will need to register for an account.

Challenge.gov Challenge.gov lists creative, technical, and scientific competitions run by federal agencies to foster innovation. You can browse open challenges, view prize amounts, and see the hosting agency. If a competition interests you, registration is required to participate and submit your solution.

GrantWatch GrantWatch is a subscription-based website that lists federal, state, local, foundation, and corporation grants in the U.S. and Canada. You can filter your search for small business grants, but you must become a member to view full eligibility details.

Small Business Innovation Research Program (SBIR) The SBIR is a competitive, awards-based grant program managed by the U.S. Small Business Administration (SBA). It encourages small businesses to engage in federal research and development with commercial potential. To qualify, you must be a for-profit business with fewer than 500 employees and meet all eligibility requirements.

Small Business Technology Transfer Program (STTR) Similar to the SBIR, the STTR program expands funding for federal R&D. A key difference is that STTR requires applicants to partner with a non-profit research institution for the first two phases. Both SBIR and STTR programs are also available through the Department of Energy and the Department of Defense. You can browse open solicitations for both programs.

Exploring state and local grant options

Federal grants are often industry-specific and highly competitive. It is wise to also explore grants and assistance programs at the state or municipal level, which can offer a wider variety of lesser-known opportunities. These grants often focus on local economic development, which means you'll be competing against a smaller pool of applicants.

Economic Development Administration (EDA) A bureau within the U.S. Department of Commerce, the EDA provides grants, resources, and technical assistance to promote entrepreneurship. You can explore funding opportunities and find your state’s agency to get help with financing, office space, and employee recruitment.

The State Business Incentives Database This database is a resource for economic developers, business finance professionals, and researchers. Created by the Council for Community and Economic Research (C2ER), it provides data on incentive programs across all U.S. states and territories. Access requires a paid membership.

Small Business Development Centers (SBDCs) Your local SBDC offers support to small businesses and entrepreneurs across the United States. These centers, often linked to state economic development agencies, can connect you with financing, networking events, and business mentors.

Corporate-sponsored small business grants

Beyond government programs, many corporations sponsor funding opportunities for small businesses. Companies like FedEx and Visa often provide significant grants to winners of contests or pitch competitions. Even if you don't secure the top prize, participating can lead to runner-up awards or valuable publicity.

FedEx Small Business Grant Contest The FedEx Small Business Grant Contest offers a grand prize of $50,000, plus funds for print and business services. It is typically open to for-profit businesses that have been in operation for at least six months and have 99 or fewer employees.

Visa Everywhere Initiative The Visa Everywhere Initiative is a global program that challenges small businesses to solve payment and commerce-related problems. The program has helped participants raise over $2 billion in funding and features four finalists who present at the annual Visa Payments Forum.

National Association of the Self-Employed (NASE) Members of the NASE are eligible to apply for monthly grants of up to $4,000. To apply, you need to log in to your NASE account and review the grant guidelines.

Patagonia Corporate Grant Program Patagonia's corporate grant program provides between $10,000 and $20,000 to innovative nonprofit organizations dedicated to environmental preservation and protection.

Nav’s Quarterly $10,000 Business Grant Nav, a financing marketplace, awards a $10,000 grant each quarter to a small business. Applying requires signing up for a free Nav account and posting on social media about how you would use the grant funds.

Finding grants for specific demographics

If you are a woman, veteran, or minority business owner, there are numerous financial incentives available from corporations, special interest groups, and the U.S. Small Business Administration (SBA). These programs are designed to support underrepresented entrepreneurs.

The Amber Grant The Amber Grant awards $10,000 each month to a female entrepreneur. Annually, one of the 12 monthly winners receives an additional $25,000. The application is a straightforward online form, though there is a $15 submission fee. You can learn more about applying here.

US Department of Agriculture (USDA) Grants The USDA provides various grants for small businesses and nonprofits in rural areas. They also offer business loans, so if you don't qualify for a grant, you may still be able to secure zero-interest financing. More information is available on the USDA programs page.

Veteran Small Business Award The Veteran Small Business Award, from the StreetShares Foundation, gives up to $15,000 to businesses that are at least 50% owned by a veteran or a veteran's spouse. The foundation's mission is to support veteran entrepreneurs.

First Nations Development Institute Grants This nonprofit organization has awarded over $46 million to projects benefiting Native American, Alaska Native, and Native Hawaiian communities. You can view a list of available grants on their website.