Starting a small business involves a lot of legwork and preparation, from starting an LLC to getting an EIN, developing a business plan, and hiring employees. However, getting the initial funding for startup costs is the biggest obstacle for many businesses. Whether you need $10,000 for basic costs or $100,000 for inventory and equipment, there are a number of grants to get you started. Read on to learn how to get a grant to start a business.
15 Grants to Start a Business
Whether you’re starting a business as a teenager, starting a tow truck business, or are considering a business loan, here are 15 grants that can help you secure funding to start a business.
Grants.gov is the source for government grants. There are over 2,500 grants ranging from research for understanding PFAs uptake and bioaccumulation in plants and animals in agricultural, rural, and tribal communities to business grants. You can search by category, topic, or keyword. You can find both grants and cooperative agreements.
Regardless of your industry, this is a good starting point to understand federal grants available in your industry.
2. Local Chamber of Commerce
The next starting point is your local chamber of commerce. They can suggest local business initiatives or grants, as well as offer other business resources.
You can check the US Chamber Foundation. They’ve partnered with FedEx to offer the Readiness for Resiliency program to help small businesses facing natural disasters.
3. Small Business Development Center
The Small Business Development Center (SBDC) offers assistance and counseling to start, run, or grow your business. SBDC offers specialized programs for women and veterans and support towards securing federal contracts.
The SBDC is under the Small Business Administration of the federal government, which also offers microloans, 7(a), and 504 loans.
4. USDA Rural Business Development Grant
Rural business development grants from the US Department of Agriculture provide financial support and technical assistance to promote rural business growth. They offer programs in rural areas for:
- Community economic development
- Technology-based economic development
- Feasibility studies and business plans
- Leadership and entrepreneur training
- Rural business incubators
- Long-term business strategic planning
You can search by state to locate state-specific programs and rural development opportunities.
5. Small Business Innovation Research Program (SBIR)
The Small Business Innovation Research Program (SBIR) is a program that encourages small businesses to engage in Federal research and development for potential commercialization. These awards-based programs are open to small businesses with less than 500 employees that are US-based and owned.
Phase I awards are generally $50,000 to $250,000 for six months. Phase II awards are generally $750,000 for two years and only open to Phase I awardees.
6. Small Business Technology Transfer Program (STTR)
Related to SBIR, the Small Business Technology Transfer Program (STTR) is open to non-profit universities, domestic nonprofit research organizations, and Federally funded R&D centers. The purpose is similar: encouraging these institutions to engage in Federal research and development for potential commercialization.
Award amounts and deadlines vary. Phase I awards are generally $50,000 to $250,000 for one year. Phase II awards are generally $750,000 for two years and only open to Phase I awardees.
7. Program for Investors in Microentrepreneurs
Program for Investors in Microentrepreneurs (PRIME) is a Small Business Administration Program grant that will provide funding for:
- Private, nonprofit microenterprise development organizations
- Microenterprise development programs run by state, local, or tribal governments
- Indian tribes interested in providing assistance and guidance to disadvantaged microentrepreneurs
This includes training and technical assistance for disadvantaged entrepreneurs, and training and capacity-building services to microenterprise development organizations.
8. Economic Development Administration
The Federal government’s Economic Development Administration offers several grants and federal funding programs, including a disaster supplement, planning, technical assistance, research, and public works and economic adjustment assistance. These grants and more are all available on grants.gov.
9. Minority Business Development Agency Centers
Minority Business Development Agency Centers aim to help minority-owned businesses seeking to expand into new domestic or global markets. These centers help small businesses grow in size and scale through all phases of development, from securing capital to competing for a contract, identifying a strategic partner, or becoming export-ready. Find your nearest Mbda Center here.
10. State Trade Expansion Program
The State Trade Expansion Program (STEP) can help small businesses prepare to expand into foreign exports. STEP provides financial awards to state and local governments to assist small businesses with export development. The purpose is to assist in growing the volume and value of small business exports nationwide.
11. National Association for the Self-Employed (NASE) Growth Grant
The National Association for the Self-Employed (NASE) Growth Grant awards NASE members grants up to $4,000 for expanding facilities, marketing, advertising, hiring and training staff, and other business needs. Grants are awarded on a quarterly basis. You could even apply for multiple NASE grants.
12. The Second Service Foundation
The Second Service Foundation offers coaching, virtual classes, and grants to help veterans, military spouses, and gold star families to help their small businesses succeed. Grants are awarded based on The Military Entrepreneur Challenge process and vary based on funding needs.
13. Verizon Small Business Digital Ready Grant Program
Verizon aims to help small business owners grow their small businesses with resources like free online courses, tools, coaching, peer networking, and grants. They have over 40 online courses and more than 200 live and virtual events, and have given out over $1 million in grant funding for small businesses. You can register by industry to stay up to date on new funding opportunities.
14. FedEx Small Business Grant
The FedEx Small Business Grant Contest chooses 10 annual winners with a grand prize of $30,000, with opportunities to receive additional funding.
15. Small Business Growth Fund
For businesses based in Washington DC, the Small Medium Business Growth Fund plans to offer approximately $2 million in grants aimed to grow and propel innovation in small businesses. Grant recipients will receive $5,000 to $25,000 grants to help accelerate business growth.
What to Consider Before Applying for a Grant?
Before applying for a grant, make sure you thoroughly research the eligibility criteria, application process, and deadlines. Understanding the grant’s purpose, requirements, and conditions is crucial to determine if it aligns with your business plan.
Consider how closely your goals align with the grants’ objectives. Most grants require a detailed proposal or explanation of how your business aligns with the grantee’s goals.
How to Increase Your Chances of Getting a Grant?
To increase your chances of obtaining a grant, focus on creating a strong and compelling business plan. Tailor each application to the specific grant’s requirements, clearly explaining how your business aligns with the grant’s objectives.
Additionally, provide thorough documentation and demonstrate the potential impact of your business. The greater the social or financial impact, the more compelling the business plan.
Launching Your Business
While you’re securing grants and preparing to launch your business, doola formation services can help. doola offers fast and free formation services in all 50 states. Get doola to help you get an EIN and open a business bank account so you can focus on securing grants, developing your business plan, and getting your business off the ground.
Can anyone apply for a grant to start a business?
Yes, anyone can apply for a grant to start a business. Some grants may have specific application requirements, while others are open to any business.
Do I have to repay a grant?
No, normally you don’t have to repay a grant. However, check individual grant terms to confirm any unique stipulations.
Can I apply for multiple grants at once?
Yes, you can apply for multiple grants at once.
Can I apply again if my first grant application is rejected?
Yes, you can adjust your grant application again even if it’s rejected. You can also consider other grant opportunities.
Are grants the only source of funding for startups?
No, grants aren’t the only source of funding for startups. You can also use venture capital, angel investors, business loans, personal funds, or personal loans.