Whether it’s to set up their business or to expand it for growth, small business owners need capital. One way to access financial assistance is by applying for grants. Luckily, there are a number of options available to business owners today when it comes to getting a grant.
How Can You Get Free Money From the Government?
Government agencies are some of the biggest and most preferred distributors of grants. It’s worth noting there are three types of government agency grants to choose from: state, local, and federal grants.
Federal grants offer the most amount of money and are therefore the most competitive option. State grants offer less money, but are not as competitive as the federal ones. At the local level, securing small grants is comparatively easier.
What Is a Small Business Grant?
A grant is financial assistance offered to an individual, business, corporation, or nonprofit organization. Usually distributed by corporations, governments and foundations, grants — unlike small business loans — don’t have to be paid back. Moreover, business owners are not required to give up equity in exchange either.
What Is a Good Reason to Get Government Grants?
While there are different options available to them, most small business owners prefer grants provided by state and local governments. That’s because securing a government grant is a great way to boost credibility. This can help businesses get more funding in the future.
What Are the Types of Small Business Grant Programs?
Broadly speaking, there are five types of small business grant programs. Each of these programs have pros and cons. Let’s take a quick look.
- Federal small business grants: For businesses looking for a lot of capital, federal grants are the best option. These federal grants tend to be tied to government agencies that have clear requirements when it comes to qualifying for the capital.
- State and regional small business grants: State grants hand out less money than federal ones, and it’s comparatively easier to qualify. For these local grants, it’s important to have a strong network to connect with the right people working at the state agencies.
- Corporate small business grants: A number of large companies and corporations have philanthropic initiatives that include grants.
- Startup business grants: Designed for entrepreneurs starting their business and looking to fund projects, these grants are issued by both government agencies and private companies.
- Specialty business grants: Another option is to explore specialty grants targeting minorities. Some of these include business grants for women, women of color, and military veterans.
Federal Government Agency Grants for Small Businesses
Let’s look at some of the more popular federal small business grants.
Small Business Innovation Research and Small Business Technology Transfer Programs
The SBIR and STTR grants are aimed at helping small businesses focusing on innovative research and development for scientific technology. This program connects businesses with 11 government agencies. To be eligible small businesses must have no more than 500 employees.
USDA Rural Business Development Grants
The Department of Agriculture provides grants to businesses in the rural parts of the country to create quality employment. To be eligible, small businesses must have no more than 50 employees and less than $1 million in gross annual revenue. Also, they must be located in a rural area.
National Institute of Food and Agriculture (NIFA) Grants
Aimed at helping small businesses in the agriculture and food space, the NIFA grants are available all through the year. To be eligible, small businesses must have no more than 500 employees.
Program for Investors in Microentrepreneurs (PRIME)
The PRIME program offers financial assistance to microenterprise development organizations. These organizations then extend support to disadvantaged microentrepreneurs. These organizations can be private nonprofits or state-run enterprises.
State and Regional Grant Programs for Business
Given the complexity of qualifying for federal grants, many businesses explore the state and regional programs. These are comparatively easier to secure. Let’s look at some of the options available.
State Trade Expansion Program (STEP)
The STEP program is aimed at small businesses that are looking to start or expand into foreign markets. The fund can also be used for international market trade shows and other expansion opportunities.
Small Business Development Centers
Local SBDCs offer comprehensive support for startup owners and small businesses. Mostly linked with a state’s economic development agency or local universities, SBDCs help local businesses connect with grants, local resources and other financing opportunities.
Economic Development Administration
The Economic Development Administration is part of the Department of Commerce. It is a great resource and a comprehensive database for small businesses looking for funding opportunities. The EDA works closely with local and state communities that administer funds to boost regional economic growth and grant opportunities.
Minority Business Development Agency Centers
The MBDA helps minority-owned businesses thrive by making it easier for them to raise money, gain contracts and compete in markets. The MBDA maintains a national network of centers that work directly with minority-owned businesses.
Corporate Small Business Grants
A growing number of private corporations and large businesses are looking to give back to the community. One way they do this is by offering small business grants to local business owners. This is becoming an increasingly popular option for those who don’t want to wait for government agency grants to come through. Let’s look at some of the popular corporate small business grants.
FedEx Small Business Grant Contest
Every year, FedEx awards $250,000 to 10 up-and-coming small businesses. In addition, it offers a $50,000 grant and $4,000 in FedEx print and business services to the top three winners. To be eligible, the small business should be U.S.-based, in operation for at least six months with less than 99 employees.
Walmart Foundation Grants
Walmart’s grants are designed for nonprofit organizations. There are two broad categories: The Community Grant Program is aimed at local nonprofits while the National Giving Program is for national nonprofits.
Idea Cafe’s Small Business Grants
The best thing about Idea Cafe’s Small Business Grants is that you don’t need to have an established business to qualify. The company offers $1,000 grants to winners who are decided by local community votes.
Visa Everywhere Initiative
The Visa Everywhere Initiative is aimed at tech startups across five regions around the world. The winner gets $100,000 at a global event. To qualify, you must demonstrate how you’ve developed a product or service that involves Visa products.
Fast Break for Small Business
The NBA, LegalZoom, WNBA, and NBA G League have teamed up with Accion Opportunity Fund to provide grants worth $10,000 and up to $500 in LegalZoom services for small business owners.
Grant Programs for Startups
While it’s challenging to secure cash grants for existing businesses, startups have a much harder time getting their business plan off the ground. That’s because funding opportunities for startups are much more limiting. Let’s look at some options available to startup owners.
U.S. Chamber of Commerce Dream Big Awards
The U.S. Chamber of Commerce Dream Big Awards offers a grant of $25,000 to small businesses for their contribution to the economy. The competition provides financial awards in a wide range of categories including emerging business and green business.
Comcast RISE provides free marketing services and technical assistance to small businesses. These quarterly awards are given to businesses that have been in operation for at least a year. To be eligible, your business must be a legally registered business located in the Comcast or Effectv service area.
Caleb Brown Urban Entrepreneur’s Community Grant
The Caleb Brown Venture Capital and Consulting Project offers a $1,000 grant to help young urban entrepreneurs. It is open to startups and the contest is held every month.
Halstead Jewelry Grant Award
The Halstead Jewelry Grant Award is aimed at jewelry startups. It offers a grant award of $7,500. On top of financial assistance, Halstead helps startups build their business and meet their financial goals.
Specialty Small Business Grants
Many small business grants are very specific to help businesses achieve success across demographics. It is this specificity that makes these grants more accessible. Let’s look at some of the options.
Small Business Grant for Women (Amber Grant)
The Amber grant foundation awards $10,000 to women-owned businesses every month. At the end of the year, all 12 winners are awarded an additional $25,000. To help boost women entrepreneurs, the foundation also offers other grants throughout the year. What’s more, the application process is pretty straightforward. Applications need to explain their business, business plan and pay a $15 application fee.
Small Business Grant for Black Women (Black Girl Ventures)
With Black Girl Ventures, black women entrepreneurs receive coaching and useful resources to grow their business. The organization offers a crowdfunded pitch competition program. Applicants need to pitch their business idea here, which is followed by a Q&A session with a panel and audience. The audience votes with their dollars.
Small Business Grant for Veteran-Owned Businesses (Warrior Rising)
Warrior Rising was founded by combat veterans. This nonprofit helps veteran owned businesses by providing grants, coaching and resources. It also connects business owners to form a close military community of veteran entrepreneurs.
Where Can You Find Small Business Grants?
Small business grants can be found at government agencies, state-run organizations and private companies.
How Do I Choose a Grant?
While choosing a grant, look for benefits that are most suited to your business. In many cases, grants come with additional benefits such as coaching, access to a strong network and more. All of these benefits can go a long way in boosting your business.
How Do I Get an SBA Grant Approved?
The Small Business Administration (SBA) doesn’t offer grants to start or expand businesses. It provides grants to nonprofit organizations, educational organizations and resource partners that support entrepreneurship.
Understand How to Qualify for a Small Business Grant
Qualifying for a small business grant depends on the awarding organization’s criteria. Often, businesses in low-income areas or those run by minority owners are given priority.
More in: Small Business Grants