Starting a businessisn’t cheap.
Testing new products, researching market trends, securing inventory—there’s no shortage of costs for a startup business. But if you haven’t even started selling yet, where does the money come from?
Seasoned small business owners might have a network of financiers, but for up-and-coming entrepreneurs, securing funding before you’ve had a chance to prove yourself can be tricky.
Every new business can do with a bit more cash, but the grant application process for small business grants involves more than putting your name on a list and waiting for a deposit. Not every grant is right for every business, and understanding how grant-issuing organizations evaluate applicants is crucial to securing the financial assistance you need.
If you plan on investing the time and energy into applying to a small business grant program, it’s important to understand the options available and pick the grant that’s right for your business.
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Federal grants
The USSmall Business Administration (SBA)is a federal government agency that provides support for small businesses with the goal of strengthening the nation’s economy.
The SBA has Small Business Development Centers across the country and offers a wide variety offederal grants, loans, and other programshelping to connect small business owners with funding opportunities from federal, state, and local governments.
- TheState Trade Expansion Program (STEP)offers federal small business grants throughout the US to assist existing businesses in expanding globally, offering funds for foreign-market trade shows and expansion opportunities.
- The SBA offers a number ofveteran assistance programsthat provide grant funding for veteran-owned businesses.
- TheWomen-Owned Small Business Federal Contracting Programoffers funds specifically to women-owned businesses, with the goal of leveling the playing field for women entrepreneurs.
- TheHUBZone programprovides assistance to small businesses with the aim of fueling growth in historically underutilized business zones.
- TheNatural Resource Sales Assistance programassists small businesses in securing state and federal government contracts through a bidding system that prioritizes them. Eligible industries include timber and forestry products, minerals, coal, oil, gas, and real estate.
- TheSmall Business Innovation Research Program (SBIR)is aimed at businesses conducting innovativeresearch and developmentprojects with commercial potential.
- TheSmall Business Technology Transfer Program (STTR)is designed to encourage joint research and development projects between small businesses and research institutions.
- USDA Rural Business Development Grantsare offered by the US Department of Agriculture to help with technical assistance and training programs for small rural businesses. The business must have fewer than 50 new workers and less than $1 million in gross revenue.
Grants.govoffers tons of federal small business grants from various federal agencies, like the Bureau of Educational and Cultural Affairs and the US Department of Commerce.
State and local grants
Many local and state agencies also offer small business grants. These grants can be industry-specific or focus on broader economic development goals. To find state and local grant opportunities, visit your state's economic development agency website or contact your local chamber of commerce.
Other US government small business grants
Apart from the SBA, there are a number of other federal agencies offering grant programs for small businesses in the US.
- TheNational Institute of Healthoffers a wide variety of funding grant opportunities for businesses developing biomedical research related to COVID-19.
- TheSmall Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR)programs offer funding for technological research for small companies, with the goal of promoting high-tech innovation.
- TheUS Department of Commerce Minority Business Development Agency(MBDA) has a wide variety of small business programs intended to assist with the growth and development of minority-owned businesses throughout the United States.
- TheUS Department of Energy clean energy grantsare offered to businesses that have previously received SBIR or SBTT funding to assist in creating clean energy and to fund companies whose goals are to combat climate change.
- The US Department of Agriculture’sRural eConnectivity Programis a grant program offering federal small business grants to companies and projects that assist rural communities, particularly in disadvantaged communities or that help to mitigate the effects of climate change within rural areas.
Non-government grants for small businesses
Government agencies aren't the only source of small business grants: many private corporations and non-profit organizations also offer private grant programs designed to help small business owners start and expand their companies.
- TheComcast RISEInvestment Fund offers assistance for independently owned businesses providing funds for advertising, commercialization, and marketing consultations, media placements, commercial creative production services, and other technical assistance.
- Activist-minded outdoor brandPatagoniaoffersfunding for small businessesseeking to address the root causes of climate change and confront environmental injustice.
- The National Association for the Self-Employed is an organization that provides a broad-range of assistance programs for small businesses, with the goal of keeping markets competitive and preventing monopolization by larger companies. The NASE offersgrowth grantsof up to $4,000 for small businesses that it believes have the potential for growth.
- The500 Global Flagship Accelerator programprovides startup capital for fast-growing technology companies with the goal of promoting technological innovation.
- TheHalstead Grantoffers a grand prize of $7,500 in start-up capital, as well as smaller grants to businesses offering innovation and advancing the artistry of the jewelry industry.
- TheStartOut Founders Programaims to provide resources for LGBT-owned businesses at all stages of their development, from aspiring founders just developing their ideas to established companies.
- TheStreetShares Foundation是一个非盈利组织,致力于assistin吗g veteran-owned businesses with access to financing and educational material. Its Veteran Small Business Award grants funds to veteran-owned businesses, especially ones that address social change within the military community.
Corporate grants
Numerous corporations and nonprofit organizations provide small business grants. Some examples include:
- FedEx Small Business Grant Contest: Open to businesses with fewer than 99 employees and that have been in operation for at least six months. FedEx awards more than $250,000 to small businesses, including $1,000 in FedEx print credits to prize winners.
- National Association for the Self-Employed (NASE) Growth Grants: NASE members can apply for grants up to $4,000 to finance specific business development activities.
- Venmo Small Business Grant: The Venmo Small Business Grant program awards 20 small businesses with $10,000 in grant funding. You also get free promotion on Venmo and PayPal websites and social media accounts. Plus, you get access to free business resources and consulting services. To qualify, you must have a US Venmo account and valid business profile. You also must have less than $50,000 in annual sales and fewer than 10 employees.
Grants for Women-owned businesses
- TheWomen Who Tech Grants Programprovides grants for women-owned tech and health tech startups, with the goal of closing the gender gap in the tech industry.
- TheCartier Women’s Initiative Regional Awards programoffers annual financial awards to women-owned businesses in their initial stages of development that are working to meet one of the 17UN Sustainable Development Goals.
- IFundWomenis a marketplace for women-owned businesses to network and secure partnerships and financing opportunities. It often partners with companies like Adidas, American Express, Diageo, Unilever, Visa, and more to offer grants to women-owned businesses.
- TheFoundation for a Just Societyoffersgrantsto local, national, regional, and international organizations that work to advance the rights of women and LGBTQI people. The FJS focuses its efforts in Francophone West Africa, Mesoamerica, South and Southeast Asia, and the US Southeast, as well as some areas of New York City.
- TheWomensNetis a community of entrepreneurial women who support businesses led by women starting their entrepreneurial journey. The organization gives away $10,000 each month and an additional $25,000 each year to women entrepreneurs.
- TheHello Alice Small Business Growth Fundoffers grants of up to $5,000 to small business owners, including women, people of color, veterans, LGBTQ+ folks, people with disabilities, and every American with an entrepreneurial dream and the will to work for it.
- Hello Alice, in partnership with DoorDash, is also currently offering grants via itsRestaurant Disaster Relief Fund, with the goal of assisting restaurants in recovering from the COVID-19 pandemic.
Grants for BIPOC-owned businesses
- Grow by Invoice2gooffers up to $15,000 to entrepreneurs who identify as Asian-Indian, Asian-Pacific, Black, Latino, Native American or Alaska Native, Arab or Middle Eastern, Native Hawaiian or Pacific Islander, LGBTQ+, or a person with a disability.
- 提供的SoGal Foundation,Black Founder Startup Grantprovides $10,000 and $5,000 cash grants to Black women and Black nonbinary entrepreneurs. It also provides resources for navigating the complex world of the Silicon Valley fundraising environment.
- TheBIPOC Small Business GrantfromAnnuityFreedom.netoffers recurring grants each month for entrepreneurs who are Black, Indigenous, or people of color.
- Backstage Capitalis an investment fund focused on under-represented groups in entrepreneurship, offering funds for small businesses owned by women, people of color, and LGBT founders.
- Main Street America’sBacking Small Businessesprogram offers funds to new entrepreneurs from under-represented communities.
Other funding for small business owners
Aside from small business grants, there are a lot of other ways for a new business tosecure the startup fundsit needs to grow. If you’re looking for other methods of financing your startup, here are a couple of options to look into:
Small business loans
Business loans are one of the most common ways that new entrepreneurs secure funding for their businesses. Unlike grants, loans do need to be repaid, so it’s important to understand how much money you need, what it will be spent on, and how you plan on making the money back.
LOAN REPAYMENT TIP:Want to know how much it will cost to take out a loan? Try our freebusiness loan calculator.
Crowdfunding for small businesses
Crowdfunding has become one of the most popular methods of raising money for startup businesses, largely due to onlinecrowdfunding sites,麦e it accessible to nearly anyone.
Rather than seeking a large sum of money from an organization or angel investors, crowdfunding involves collecting small sums of money from ordinary people that believe in the potential of your own business.
Equity crowdfunding for small businesses
Equity crowdfunding is similar, but a little different from ordinary crowdfunding. With equity crowdfunding, everyday people commit smaller sums of money to your business in exchange for equity.
Until recently, new businesses could only sell shares to accredited investors, meaning there was strict net worth criteria that kept members of the public from being able to invest. The restriction also acted as a huge barrier to entrepreneurship, since newer merchants are less likely to have built a network of wealthy investors.
With equity crowdfunding, investment and entrepreneurship have become more accessible than ever.
Learn more:Equity Crowdfunding: Is It Right For You?
Capital investors for small businesses
Capital investors refer to both angel investors and venture capital funds. Accredited investors can help provide funding for your business startup in return for equity ownership or convertible debt (a loan that may be converted into equity in the future).
The biggest benefit to capital investors is that they can provide you with large sums of money in a relatively short amount of time. At times, they can also provide valuable mentorship as you work to grow your own business.
Learn more:
- Investing in Your Business: What You Need to Know Before You Get Started
- How to Start an Ecommerce Business: Build, Launch, and Grow a Profitable Online Store
How to get a small business grant
Small business grants are offered by all kinds of organizations, to alltypes of businesses, with a wide range of values, missions, and functions.
If you’restarting out as a small business ownerand looking to apply for small business grants for your startup, here are some key points to keep in mind:
- Look for grants within your industry.很多小型企业授予行业specific, so it can help narrow down your search if you focus on organizations and research institutions within your particular industry. Focusing on one industry also builds buzz around your business, and can help build connections with industry figures who may be able to offer guidance and investment opportunities.
- Read the eligibility requirements carefully.It sounds obvious, but it’s not hard to overlook aspects of grant eligibility requirements and end up putting a ton of effort into applying for a grant you’re ineligible for. Read the requirements carefully and evaluate whether you qualify for the grant award. If you’re unsure whether you qualify, contact someone from the organization and ask.
- Make sure your business aligns with the organization’s mission.Organizations that provide small business grants do so in the hopes of achieving a specific goal they care deeply about. Ask yourself how yourbusiness modelhelps contribute to achieving this goal. If the answer is hard to parse, you might want to consider applying for grants with another organization.
- Know what you’ll be spending the grant money on.Some organizations may stipulate what grant money will be spent on, but even when they don’t, it’s still important to have an idea of how you plan on using the money. When an organization is determining whether to issue your business a grant, having abusiness planand knowing how the money will be spent will help them understand more clearly how your business aligns with their mission.
- Focus your pitch on innovation and expansion.Organizations that issue small business grants typically favor for-profit businesses that they see as innovative, forward thinking, and on a path to growth. Focus your pitch on how you plan to scale, any new technologies you might be developing, and what your business can do to help the organization with its mission.
Small business grants are not loans, so lenders aren’t expecting to be paid back. They’re not investment capital, either, so issuers aren’t expecting to own assets of your business. But that doesn’t mean that small business grants don’t come with expectations and incentives.
Issuers still expect areturnon their investment, just not a monetary one. Instead, organizations that provide small business owners with grants want to feel confident that your business idea contributes to their organization’s mission—whether it be a common good, innovation in a particular industry, or economic growth in a specific community.
A small business grant isn’t necessarily “free money” either. Grant issuers often have stipulations about how the money can be spent, sometimes even spending the money themselves on specific resources they believe will help your business grow.
Fuel growth in your startup with a small business grant
The first few months of running a business are often the most challenging. It takes time for a business to become profitable, but costs can add up quickly.
Small business grant programs can make a world of difference for a new small business owner. Not only do they provide a vital injection of funds, they can also help to establish connections in your industry and meet your business needs early on.
If your business has the potential to innovate your industry and build new technologies to serve the public good, chances are you’re a great candidate for a small business grant.
