For small businesses and startups, any financial support can often make a huge difference for small businesses and startups. Grants for small businesses provide free and instant monetary relief to businesses in need. But with so many different types of small business grants available, navigating that landscape can be difficult.
The COVID-19 pandemic added more small business grant opportunities. While these PPP loans are beneficial, it is not always easy to find information on the different types of grants for small businesses. This guide will provide a brief overview for those researching and applying for small business grants.
How to Acquire Small Business Grants: What Are the Requirements?
Depending on the type of grant, the requirements for acquiring one will vary. Generally speaking, grant eligibility requirements are as followed:
- The applicant is an innovator or inventor providing solutions for the betterment of society
- The business is rooted in green values, and has built its foundation on eco-friendly values and principles
- The business is minority-owned: this includes women, people of color, or veterans in business
- The business is a nonprofit organization supporting a specific cause, and the grantor aligns with your mission
- Business owner has not been able to procure funding from a bank, investor, or through government aid
- Business has a defined outline, clear projections, and a mapped-out plan for success
- Business is transparent about its financial data
Before applying for a small business grant, make sure there is a thorough understanding of what’s expected from you. Gather all necessary information before applying. The process could take weeks, and it’s important to know what you’re getting into ahead of time.
Get a Small Business Grant: Discover What Works for You
Choosing the right business grant takes time, research, and preparation. Before beginning the application process, here are some factors to consider.
How to Choose a Grant
Choosing the right business grant means doing your part to research funders. When researching grantors, make sure you understand the types of grants offered in your decision-making process:
- Government Grants: In most cases, the eligibility for a government grant is extremely narrow. Government grants are typically avowed to businesses that will bring growth to the world at large. Businesses that are rooted in agriculture, efficient energy, science, or technology usually receive government funding. Government grants can take 3-6 months to process.
- Non-Profit Organizations: Nonprofits serve underrepresented groups that struggle to receive government aid for their business.
- For-Profit Organizations: For-profit organizations, although they offer the broadest eligibility, are also the most sought-after. For-profit grants are given based on merit and the quality of application. These competitive grants can take months to process.
Depending on the needs of your business, the age of your business, and your personal demographic, you can apply for grants accordingly. Many business owners will even apply for multiple grants at a time. This way, they can secure their chances of receiving grant approval.
When choosing a grantor, you’ll also want to research the agency and its values. Grantors will often have a vision for where their funds are going. Of course, grantors want to ensure that their investment is going toward the mission at hand. Some questions to consider when reviewing grantors are:
- Do the values of this agency align with the values of my business?
- Can I meet the needs and expectations of this funder, and how will I do so?
- What is my vision, goal, and mission if I receive this money?
- Do I have the projections, plans, and a map of my business trajectory?
- Am I willing to continuously report to my grantor the status of my plans, projects, and business milestones?
When beginning the application process, it’s helpful to have the right person in your corner, too. Make sure to outsource professional help to a trusted advisor when applying for a business grant. Small business owners shouldn’t have to make these lofty decisions on their own.
Tips When Applying for a Grant
After doing extensive research, you’re ready to move through with the application process. Here are some tips to follow when applying for a business grant:
- Cast a Wide Net: Remember, you can apply for as many grants as you see fit to ensure your chances of funding. Many business owners get hyper focused on specific opportunities. Weigh out your options, and keep your chances open.
- A Grant is Not a Loan: Loans take significantly less time to procure than grants. Grants, however, take time. You must apply for it, wait for a response, win the grant, and then get approved for funding. This process requires patience, so don’t get discouraged during the application process.
- Look For New Grants Every Day: Grant opportunities open and close every day. Turn the grant application process into a business practice. Search for new opportunities on a regular basis, and stay committed to the process.
Agencies in Charge of Small Business Grants
Several agencies distribute startup and small business grants for several reasons. Many government agencies will provide grants to small businesses related to their work. For instance, the U.S. Department of Agriculture offers Rural Business Development Grants to small businesses in rural areas.
The U.S. Small Business Administration (SBA) is the primary federal agency responsible for supporting small businesses and startups. The SBA does not often administer grants, but the agency is responsible for facilitating many grants and connecting small business owners with support and resources to help them flourish.
In addition, most state governments offer a variety of their own small business grants. Many of these are also funded in part by the SBA.
Lastly, many corporations and private institutions offer their own small business grants. Many corporate small business grants are intended for non-profit companies, but this is not always the case.
Different Types of the Small Business Grant
With so many different avenues to receive small business grants, it can be helpful to break them down into categories. This non-exhaustive list will highlight various grants for small businesses that are available from different sources.
Federal Grants
As mentioned above, many government agencies provide small business grants to companies related to the particular agency’s work. For a comprehensive list of federal small business grants, check out grants.gov. To give a sense of the scope of federal grants for small businesses, here are some of the most prominent federal grant programs.
SBIR and STTR Grants
Two of the most extensive federal grant programs in the U.S. are the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. As the names suggest, these programs encourage small businesses to participate in federal research and technological development. The SBIR and STTR programs award grants to small businesses to help facilitate new research “with the potential for commercialization.”
For example, many SBIR and STTR grants are awarded for new research in medicine, healthcare, environmental sustainability, and other areas. While many small businesses are eligible for these research grants, there are also many application restrictions. Be sure to review any program requirements before applying for an SBIR/STTR grant.
Rural Business Development Grants
As mentioned above, the USDA’s Rural Business Development Grants are aimed at small businesses in rural areas. These grants intend to help grow and support rural communities around the country through economic growth. There are firm limits on the size of businesses eligible for these grants (fewer than 50 workers, less than $1 million in gross revenue).
Businesses, non-profits, towns/communities, state agencies, tribes, and higher education institutions are eligible to apply for this USDA program.
Program for Investors in Microentrepreneurs (PRIME)
PRIME grants are among the only grants offered directly by the SBA. This program is primarily intended for non-profit and underprivileged microenterprises. A microenterprise is defined as a business with fewer than ten employees.
In addition to microenterprises and non-profits, state, local, and federal tribe governments may apply for this program.
U.S. Chamber of Commerce Dream Big Awards
The Dream Big Awards are an annual competition where the Chamber of Commerce awards grants to small businesses in several categories. Some award categories include Community Support and Leadership, Green/Sustainable Business Achievement, and Emerging Business Achievement.
While the 2022 Dream Big finalists have been announced, there will soon be an opportunity for 2023 applications. This is an annual event with many regular small business grant opportunities.
State and Local Grants
In addition to federal grant programs, many state and local grants are available through local agencies. Many of these services are supported by larger federal agencies (particularly the SBA), but the grants and services are administered locally.
Additionally, not all services offered by these groups are directly related to grants. Some of these programs help connect small business owners with many resources, including but not limited to access to grants.
Several state governments also offer special incentives and grants for small businesses within the state.
State Trade Expansion Program (STEP)
STEP is funded by the SBA but is run through state agencies. This program aims to connect small businesses with international customers to increase small business exports. This program offers comprehensive support to grow within the global market.
You should contact your local project director if you own a small business and would like to apply for this program.
Minority Business Development Agency
As the name implies, the MBDA is dedicated to supporting minority-owned small businesses across the country. This support comes in many forms, including connecting minority small business owners with available grants for their businesses.
There are MBDA centers found across the country in many different communities. Look up your local community to learn more about how the MBDA can help your small business secure grants or grow in other ways.
Small Business Development Centers
Like MBDA centers, Small Business Development Centers can be found in communities across the country. The SBA supports this program and helps connect small business owners with resources. While SBDC does not offer grants, they often help connect small business owners with grant opportunities. These centers can also provide small businesses counseling, training, and more.
Economic Development Administration
The EDA is a bureau of the U.S. Department of Commerce. The EDA provides various grants for small businesses across all 50 states. In addition to small business grants, the EDA can help small businesses in areas like recruiting and finding locations.
The range of grants available through the EDA is enormous, and the easiest way to find out about specific grant opportunities is to search the EDA database.
Corporate Grants
Government agencies are not the only ones responsible for grant disbursement in the U.S. Many large corporations provide grant opportunities for small businesses and nonprofits across the country. These grants may sometimes be tied to specific services offered or membership to the corporation in question.
Other programs have no such requirements and are open to any qualifying applicants. Below are a few examples to give an idea of the type of corporate grants available to small businesses.
FedEx Small Business Grant Contest
One of the more well-known corporate grant programs is the FedEx Small Business Grant Contest. There are a few requirements for entry into the FedEx contest. Namely, your business must have an available shipping account number with FedEx that has been operating for at least six months. FedEx states that shipping needs are a vital consideration in determining recipients of their grants. Additionally, companies applying for this contest must be for-profit and have fewer than 99 total employees, including the owner.
The FedEx Small Business Grant Contest awards direct financial support and support for FedEx business services.
National Association for the Self-Employed (NASE)
Members of the National Association for the Self-Employed are eligible to apply for $4000 grants to help their businesses. These grants are awarded multiple times each year, with applications reviewed every three months.
Recipients of the NASE Growth Grants are determined based on the applicant’s submitted business plan and intended use for the grant funding. Any member of the NASE is eligible to apply, and grants are awarded multiple times per year. However, the strength of your application is the primary determining factor in whether or not you will be awarded a Growth Grant. Because of that, applicants should take care to make sure their applications are thorough and strong.
Fast Break for Small Businesses
This corporate grant program is jointly funded by the NBA, WNBA, and LegalZoom, in partnership with the Accion Opportunity Fund. The Fast Break program is new and relatively expansive. 2022 is the first year of the program’s existence, and multiple grants have already been awarded.
Eligibility for this program is pretty wide open, though certain characteristics are emphasized as part of the program’s mission. Any U.S.-based small business that has been in operation for at least six months is eligible. However, the program aims to help businesses affected by the COVID-19 pandemic or represent underserved or marginalized communities in America. Small business owners may find more information about the rules, awards, and eligibility on the Accion Opportunity Fund website.
Many other corporate entities sponsor their own small business grant programs. Some other examples include:
Comcast
Patagonia
Walmart
Visa
Other Small Business Grant Opportunities
In addition to the grants listed above, many programs and organizations are dedicated to serving particular demographics or communities. Programs like the Amber Grant for Women award monthly grants to women small business owners nationwide. The program awards two $10,000 grants monthly, plus two additional $25,000 grants at the end of each year.
The MDBA, mentioned earlier, is another nationwide association that specifically serves minority small business groups. Many other private organizations award grants for philanthropic purposes to minority business owners or businesses/communities in underprivileged areas. MBDA centers and SBDCs are often the most valuable resources for finding information about such programs.
New Small Business Grants
Some grants are available for small business startups to make life easier for companies just starting out. Most of these grants are offered as local or corporate grants. While there are many federal grants available for small businesses and startups, there are not many that specifically target new startups. However, some federal grant opportunities can be used for grants for small business startups. Several of these have already been touched upon above.
One potential avenue for startup grant funding is the SBIR and STTR programs. While not explicitly targeted toward new businesses, science and tech startups often use these programs to fund research.
The Chamber of Commerce Dream Big Awards target businesses in various categories. These awards are not directly targeted toward new small businesses but provide opportunities for small businesses to receive federal grant funding.
Aside from startup grants, many small business entrepreneurs take out small business loans when starting. The SBA offers loans up to $50,000 for small businesses.
COVID Relief Grants
Small businesses across America were severely impacted by the measures taken at the start of the COVID-19 pandemic. The U.S. government established several programs to help those businesses and communities recover. In fact, Blueacorn was founded during the pandemic to help small business owners navigate the PPP loan application process. While PPP and most federal programs offering grants related to COVID have ended, some states are still offering relief funding as of late 2022.
Blueacorn continues to help businesses with loan forgiveness, loan applications, and other small business financial services.