Obtaining funding for your startup can be the most challenging element as you get off the ground. Though there are many types of funding to choose from, one option that often gets overlooked is small business grants. 

These small but mighty investments can enable a founder to make that first hire or invest in a new technology for their business. And there’s something for every entrepreneur, from  government-sponsored grants to those funded by Fortune 500 corporations.

Here’s everything you need to know about finding (and winning) a small business grant.

What is a small business grant?

Small business grants provide limited investments — anywhere from a few hundred dollars to a hundred thousand or more — for startups and other smaller companies. This is a great first step if you’re not ready to go through a more traditional and rigorous venture capital funding process. Grants can come from government agencies, nonprofits, or social responsibility arms of major corporations. 

They don’t usually require repayment (like loans) or other trade-offs like equity or a decision-making stake in your business (like traditional investors). Eligibility to apply for grants varies based on the body offering it, so before applying, make sure your business is the size, industry, and demographics appropriate for that grant.

What to consider when applying for small business grants

Applications for grants take a substantial amount of time and effort. In addition to filling out the required information, you may have to go through multiple rounds of interviews or win a pitch contest in order to receive funding. If you need cash fast to keep your business afloat, you should consider looking at loans or other short-term investment options first.

Otherwise, think about the balance between your time and the amount of support and capital you’ll be receiving with the grant. Some grants are part of larger support networks, such as membership to an accelerator or residency. Others may offer non-capital-based support like advisers and mentors. 

As you research small business grants to apply to, think about:

  • How competitive the grant is to win, and whether you have the time to write a strong application
  • How you plan to use the funds from the grant. You’ll need to have a solid business plan in hand for judges to evaluate
  • What kind of commitment you’ll need to make to the community or to a program like an accelerator should you receive the grant
  • Whether the mission or vision of the grant matches your business model 
  • Your eligibility for the grant based on revenue, demographics, or other factors
  • How many grants you want to apply for at one time, especially if they come with broader commitments 

There are thousands of grants out there for you to choose from, but don’t try to do everything at once. Narrow your search as much as possible based on the grants that align with your business goals and your next growth milestone. 

How to apply for a small business grant

Two creative millenial small business owners working on social media strategy using a digital tablet while sitting in staircase-4Since grants come in so many shapes and sizes, each application process can be unique. The grants are often mission-driven or aligned to certain industries, demographics, or geographies, so what you can apply for varies dramatically based on who you are, your business model, and company location. 

Generally, most applications will ask for certain pieces of information:

  • Business name, legal status, and address
  • An application essay, resume, and/or cover letter explaining who you are and your founder story
  • Elevator pitch and/or pitch deck (potentially via video)
  • Why you’re applying for the grant
  • Business metrics, like revenue, number of customers, and number of employees
  • Short-term or long-term business plan
  • Website, social media handles, and your headshot

When you can apply for small business grants

The timing for applying to business grants varies, but typically you need to be established in some way before you can give it a go.

Some grants evaluate businesses on a rolling basis; others have set deadlines each year. Either way, you’ll need to determine your eligibility on a grant-by-grant basis, as some require that you’re already making a certain amount of revenue or have a certain size customer base. Others are the opposite, with the deciding factors more focused on the ceiling of what your business could become. 

19 small business grants you can apply to

To find small business grants, search through engines like Grants.gov or GrantWatch — or figure out options on a state-by-state basis through the State Business Incentives Database and your local chamber of commerce.

We’ve compiled a list of some of the best federal, state, corporate, and nonprofit small business grants you can apply to — but don’t forget to explore local options as well. 

Federal and state-sponsored small business grants

Sponsored by the US Small Business Administration, these 2 funds are the largest federal funds available for domestic-based startups working on innovative technology and research and development. The 2 programs are slightly different — STTR is for more technology-driven companies, while SBIR is more for research-based work — but both are competitive and involve public-private partnership with governmental institutions in areas of critical research.

In addition to the SBIR/STTR programs, the Small Business Administration also sponsors this grant, which awards states and local governments funds to assist in exporting and expanding into international markets. These are managed and distributed by your local or state government, but you can learn more on the SBA’s website.

The EDA sponsors several grants on a state-by-state level divided by industry; it also supports certain funds designed to help businesses post-covid. You have multiple options for grants through the EDA based on your business type. For example, the EDA grants include funds for tourism and outdoor recreation, assisting with statewide planning, and economic relief for individual businesses in need — as well as other pitching and entrepreneurship competitions you can participate in. You can apply directly on their website.

Part of the US Department of Commerce, the MBDA offers pitch competitions and grants throughout the year for domestic minority-owned businesses. They also have dedicated resources and events for minority entrepreneurs looking to get started, so it’s worth checking out their website for more information.

The US Department of Agriculture sponsors a variety of grants designed for small rural-based businesses (under $1m in revenue, with fewer than 50 workers). There are multiple grants to apply for based on your business plan (such as whether you plan to use the money for training or technical assistance, acquisition of land or machinery, or community economic development). However, you need to demonstrate the benefit to rural cities or towns in some way. Grants range from $10k to $500k.

For pharmaceutical, scientific, or biotech startups, the National Institute of Health sponsors several grants throughout the year. You can search on their website for research grants, fellowships, and other resources such as career development. 

  • Other Federal and State Opportunities

To look for grant opportunities from other federal and state agencies, such as the Department of Energy, the Department of State, or the Environmental Protection Agency, the SBA compiles a list of open grant applications on their website you can browse through.

Corporate-sponsored small business grants

With 3 grand prize winners taking home $50k each and 7 first-place winners taking home $20k, the stakes are high for FedEx’s small business contest. In addition to the money, winners receive free software subscriptions, website audits, and other resources like financial or packaging consultations.  

Fintech startups can apply to Visa’s competitive grant program, which offers over $500k in total prizes. Eligible startups include those working with blockchain, cryptocurrency, digital wallets, alternative lending, merchant services and retail technology, and more. Visa selects 5 regional finalists that then compete head-to-head at the global finals event.

The yearlong fellowship program is for female founders of early-stage startups generating at least $75k in revenue. Fellows receive mentorship, virtual education, access to peer-to-peer networking, and a $5k grant.

Black-owned businesses can apply for Capital One’s Business Grant. The awards go up to $10k, and winners get access to Capital One’s business hub and peer network for small business owners.

Sponsored by Mastercard, this grant is for Black, female-owned businesses. Grantees receive $10k each, plus digital business tools, mentorship, and more. There is a national version of this grant and a local version in select US cities.

Nonprofit-sponsored small business grants

Run by WomensNet, Amber Grant gives out $30k+ in total prizes every month, in addition to quarterly and annual grants. Multiple business categories are eligible, ranging from marketing to animal services. 

Operation Hope offers entrepreneurship workshops and funding to founders from underserved and impoverished communities, or those unable to receive traditional loans or capital. This intensive 8-week program combines business training, financial counseling, and networking to help startups get off the ground.

StreetShares sponsors the Veteran Small Business Award, which offers financial support to veterans looking to start their own businesses. Their grant includes coaching, educational content, mentorship, and networking events designed to help military members grow their careers after service.

IFundWomen offers a variety of grants in partnership with major corporations. You can apply to individual grants or submit an application to their universal database, which pairs eligible entrepreneurs with relevant grant opportunities.

SoGal is an online community for diverse entrepreneurs and investors, focusing on women and nonbinary founders to close the diversity gap in entrepreneurship. Their startup grant is geared toward Black, female-owned businesses; awards range from $5k to $10k.

The Barstool Fund is a nonprofit, 30-day fund started by Dave Portnoy (of Barstool Sports fame). It’s designed to help small local businesses like restaurants, bars, hair and nail salons, and dry cleaners deal with the fallout from the covid pandemic. They’ve already given $40m to business owners around the country and supported over 400 businesses.

This accelerator accepts applications on a rolling basis and puts entrepreneurs in the heart of Silicon Valley for an intensive 4-month program with networking opportunities, business education, and a $150k investment.

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Originally published Apr 14, 2022 6:00:00 AM, updated April 17 2022

Topics:

Startups