Small business grants: 20+ grants and resources to fund your future without debt
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Originally Posted On: https://quickbooks.intuit.com/r/funding/small-business-grants/
Securing the funds you need to get your business off the ground is one of the biggest challenges small business owners face. Fortunately, there are resources specifically designed to help you overcome this problem—and no, we don’t just mean loans. Small business grants are a way to get the funds you need to support operations without having to worry about interest rates and monthly payments.
There are several ways to go about getting a small business grant, and we’ll cover them—and more—in this guide. Keep reading for a comprehensive overview of small business grants, or use the links below to jump to a specific topic.
- What are small business grants?
- Types of small business grants
- How to apply for a small business grant
- Resources to guide you
- Frequently asked questions
What are small business grants?
Small business grants are a small to medium amount of money that’s given to you to help fund your business. Many grants are offered by the federal government, but you can also find grants through educational institutions, nonprofits, corporations, or other organizations.
There are many grants that are designed to help entrepreneurs further their business initiatives. Simply put, grants raise capital for your business without you needing to take out a loan, rack up credit card debt, or give up ownership. The main benefit of business grants is the money awarded doesn’t need to be paid back.
Wait… that sounds like free money.
That’s a common perception, but it’s hardly the case. Most grant programs have a fairly rigorous application process. It often requires a well-crafted business plan, detailed reporting (like financial statements), and a business idea rooted in serving the greater good.
Usually, the entities that offer grants are looking to support businesses that align with their mission in some way. For instance, an ocean advocacy organization may offer grants to companies that specialize in products that reduce plastic pollution.
Depending on the type of grant, the funding prerequisites or motivations may vary. While there isn’t a repayment requirement, there are expectations, such as transparency and reporting, that help hold grant recipients accountable.
What is the difference between a small business grant and a small business loan?
With small business loans, you are expected to pay the money back to the lender. However, with small business grants, there is no repayment requirement. Another major difference between grants and loans is that grant money is typically restricted to certain uses. When applying for grants, there should be guidelines that specify what grant money can be used for.
Types of small business grants
The different types of grants available for small businesses are nearly endless. However, not every grant is going to be applicable to your small business, so it’s important to learn more about the grants before applying. Many grants target specific initiatives such as scientific research, technical assistance, or economic development in rural areas—meaning eligibility is limited.
To help you get started, here are some of the most common types of grants and examples of potential grants you can apply for.
Federal small business grants and startup grants
The American government rarely conducts research or creates new technologies on its own. That’s why—when a political platform promises dedication to something like environmental sustainability or curing diseases—government agencies award grants to small businesses already striving to meet these goals. The same is true for growth grants meant to fuel innovation through startup businesses.
Federal grants typically fall into one of three main categories:
- Research and development grants
- Exporting grants for selling internationally
- Nonprofit or local government work grants
1. Research and development grants
Many government goals require research and development. From health care to the environment, the government needs private businesses and organizations to conduct research and develop products, services, and programs to address problems.
Take a look at some of the programs below to see how the government works with small businesses to efficiently research problems and develop responsive solutions.
- Small Business Innovation Research Program: The Small Business Innovation Research (SBIR) program awards grants to U.S.-based small businesses. According to the program’s website, these businesses “engage in federal research/research and development with the potential for commercialization.”
- Small Business Technology Transfer Program: The Small Business Technology Transfer (STTR) program is similar to the SBIR program in that it funds research and development projects that meet federal needs. A vital component of the STTR program is the “expansion of the public/private sector partnership to include the joint venture opportunities for small businesses and nonprofit research institutions,” according to the SBA website.
- National Science Foundation: America’s Seed Fund: Through America’s Seed Fund, the National Science Foundation (NSF) provides grants to startups and small businesses that concentrate on high-risk, high-impact technologies. These technologies include promising concepts whose success is not yet known.
2. Exporting grants for selling internationally
The federal government is always interested in increasing exports. Therefore, grants are available to organizations dedicated to decreasing barriers for small businesses to export out of the country.
In fact, the federal government manages a specific program that increases the export capacity of U.S.-based small businesses.
- Small Business Administration’s State Trade Expansion Program: The State Trade Expansion Program (STEP) is a three-year pilot program that helps U.S. small businesses enter the international marketplace. The federal government partners with state and local governments to facilitate the program.
3. Nonprofit or local government work grants
Because nonprofits are issue-driven, their goals often align with federal government goals. However, nonprofits typically have shoestring budgets and less ability to raise money from outside investors and banks.
That’s exactly why the federal government funds many nonprofits on either a one-time or renewal basis through various grant programs. Here are a few of many examples.
- National Institutes of Health (NIH) Grants: Both for-profit and not-for-profit research institutions receive grants continuously to research health issues that are critical to the U.S. and the broader world. Grant types include research grants, career development awards, research training and fellowships, program project or center grants, resource grants, and trans-NIH programs.
- Environmental Protection Agency Grants: The U.S. Environmental Protection Agency (EPA) awards more than $4 billion annually to fund environmental projects. These grants are typically awarded to nonprofit organizations and state governments.
- U.S. Department of the Interior Federal Grants Program: The U.S. Department of the Interior (DOI) oversees domestic lands, water, wildlife, and energy through scientific study and projects. Through the U.S. Fish and Wildlife Service, Indian Affairs, and National Park Service, the DOI manages an extensive grant program that helps fund nonprofit work in these areas.
Additional federal grants
The federal government offers a wide array of small business grants that can apply to a variety of industries. Federal agencies such as the Department of Agriculture and the Department of Energy, for instance, have their own federal small business grants. Some examples of federal grants include:
- Boots to Business (B2B) : A grant program for veterans and active duty service members, available through the U.S. Small Business Administration (SBA). SBA loans are another option.
- USDA Rural Business Development Grants : This U.S. Department of Agriculture grant program awards funds to help small rural businesses support training, strategic planning, and more.
- National Institute of Food and Agriculture (NIFA) : There are a diverse range of grant opportunities for small businesses through NIFA.
- United States Environmental Protection Agency : This agency offers a variety of grant programs that help small businesses and organizations overcome environmental challenges.
State and local government grants
Where the federal government awards small business grants to tackle national and global issues, state and local governments issue grants to address needs within their state.
For example, the EPA and Department of Energy award federal grants that cover the expanse of environmental challenges. In contrast, the city of Los Angeles’ environmental grants focus on water usage and clean air, while the state of Kansas favors soil preservation.
Two common trends show up in state and local government small business grants.
First, state and local governments use grant money to attract new businesses and create jobs. Second, they fund projects that meet a specific local need.
Of course, there’s a huge variety of state and local grants—far more than we could possibly list here. But we’ve pulled together some available options so you can get a feel for the different types of grants that are out there.
- Texas Workforce Commission’s Skills for Small Business program : This program provides funding for employee training offered by local community or technical colleges.
- California Small Business Technical Assistance Expansion Program : This statewide effort provides funding to improve technical resources and networks for small business owners.
- Arizona Small Business Association Technical Grants : This program provides funding resources to help small businesses train new hires and current employees.
- Colorado Small Business Development Center (SBDC) : This grant database features programs prioritizing Colorado small businesses and those with initiatives that benefit the immediate community.
- Florida small business grant resources : Small business owners will find a guide to Florida small business grants on U.S. Representative Darren Soto’s website.
Regional government grants
Regional government agencies and organizations may offer small business grants for companies that help elevate marginalized communities or solve local issues. Search for grants offered by your local government to see what is available in your region. Here are some examples of the types of regional grants available:
- The City of San Diego’s Small Business Relief Grant Fund : This program is designed to help small businesses in San Diego sustain themselves amid the changes they’ve had to make following COVID-19.
- The City of Chicago’s Small Business Improvement Fund (SBIF) : This program offers grants to commercial and industrial businesses for permanent building improvements.
- The City of Austin small business grant resources : The City of Austin has several grant opportunities for business in or moving to the Austin area.
- The City and County of San Francisco mini-grants : The City and County of San Francisco has set up mini-grants for neighborhood and women-owned businesses affected by COVID-19.
Grants for women and minorities
According to the U.S. Census Bureau, only 18.3% of small businesses are minority owned and 19.9% are women owned. This could be, in part, due to the gaps in ownership funding opportunities for minorities and women. For example, only 2.3% of venture capital dollars went to all-female founding teams in 2020, and new, black-owned businesses start with almost three times less capital.
Thankfully, both private and government organizations are trying to fix this imbalance through small business grants specifically for minorities and women.
- Minority Business Development Agency: The Minority Business Development Agency (MBDA) is part of the U.S. Commerce Department. It promotes the growth of minority-owned businesses in the United States. It conducts research, facilitates grant applications, and issues its grants under different programs and projects.
- National Minority Supplier Development Council’s Growth Initiative: The National Minority SupplierDevelopment Council (NMSDC) advances business opportunities for certified minority business enterprises in a globalized corporate supply chain. The NMSDC Growth Initiative provides equity capital from institutional investors while ensuring businesses retain their minority status through management and control.
- Women Business Centers: The U.S. Small Business Administration (SBA) sponsors around 100 Women Business Centers across the country. These centers help women-owned businesses find funding through both federal and private grants.
- Amber Grants for Women: The Amber Grant program started in 1998 to honor a young woman who passed away before she was able to fulfill her entrepreneurial dream. Since then, 12 women-owned businesses are awarded Amber Grants each year to help grow women-owned businesses.
Demographic-focused grants are available for businesses owned by certain minority groups and entrepreneurs from underrepresented communities.
- Native American Business Development Institute (NABDI) Grant : This grant program helps tribes evaluate the risk of business endeavors.
- U.S. Department of Commerce Minority Business Development Agency (MBDA) : MBDA offers several grant opportunities that support minority-owned business development.
- First Nations Development Institute : This grantmaking program awards financial and technical resources to Native American-owned organizations.
- National Black MBA Association Scale-Up Pitch Challenge : Targeted toward Black-owned startups that need early investments to get their business off the ground.
- NAACP x BACARDI : This grant program is open to Black-owned small businesses that operate in the beverage and alcohol sales and hospitality industries.
Grant programs for small businesses don’t end with federal and state governments.
Large corporate enterprises also benefit from the creation of small businesses. Because small businesses create more jobs, they play a key role in stimulating the economy. As the saying goes, a rising tide lifts all boats—which means big companies are often willing to grant money to develop the small business world.
Similar to government grants, corporate grants are awarded to businesses that meet a defined set of goals or standards.
- FedEx Small Business Grant Contest : Twelve U.S.-based small businesses are awarded grants through this program. Grants may be in the form of funding or FedEx Office® print and business services.
- National Association for the Self-Employed (NASE) : NASE awards business development grants that can be used to help grow your business.
- Caleb Brown Urban Excellence Community Grant : This grant program is designed to nurture urban entrepreneurship and help rebuild local communities.
- Visa Everywhere Initiative (VEI) : This grant program is designed to support the global startup community and has several categories.
- Patagonia Corporate Grant Program: Outdoor gear company Patagonia started a grant program to fund organizations that are focused on protecting the environment.
Private grants are those offered by a private organization or individual. These types of grants usually have fewer restrictions because the funds are awarded by a private entity.
- Ford Foundation : Henry Ford’s foundation has a variety of grant opportunities for organizations that are driving social justice and building movements across the globe.
- J.M. Kaplan Fund : This private grant program supports entrepreneurs dedicated to solving urgent social challenges.
- The Rockefeller Foundation: This foundation provides a variety of grants for social causes and small businesses, including micro-grants for Black-owned small businesses affected by COVID-19.
- Robert Wood Johnson Foundation : This foundation provides grants to organizations that are focused on improving health and health care for Americans.
- The Heinz Endowments : This foundation provides grants for organizations focused on sustainability, arts, and more.
COVID-19 grant programs
The coronavirus pandemic significantly impacted the economy and closed down operations for many businesses. Due to the impact that COVID-19 had on small businesses specifically, there are several new grant programs available.
- Paycheck Protection Program : This SBA program was established to help small businesses maintain their workforce. Note that this funding is positioned as a forgivable loan.
- Shuttered Venue Operators Grant : This SBA grant program is directed toward small businesses that have had their venues shuttered due to COVID restrictions.
- GoFundMe’s Small Business Relief Fund : Micro-grants will be awarded to businesses affected by COVID.
- Coalition to Back Black Businesses : The coalition has organized a post-COVID recovery initiative for Black small businesses.
- California Small Business COVID-19 Relief Grant Program : The state of California is providing several rounds of funding for nonprofit organizations and small businesses that have been impacted by COVID-19.
You should also consider looking into the SBA Economic Injury Disaster Loan and similar assistance programs to help your business recover post-pandemic.
Competition for grants is often very high, so it’s important to spend your time wisely, only applying for grants that are a good fit. Even then, other factors that come into play, but this approach can help you use your time most efficiently and hopefully secure funding sooner.
How to apply for a small business grant
Keep in mind when applying for business grants: It requires a lot of research and patience. However, coming up with a plan can help you streamline the process. Follow these steps to start the grant application process:
- Find grant options to apply for.
- Carefully review the criteria and application guidelines.
- Complete the necessary forms and make sure to include any required documentation regarding your business activities. You may need to provide your business plan, financials, and other information that provides insight into your operations.
- Submit your application by the stated deadline.
- Continue applying for other grants in the meantime and repeat the process.
Note that you may be required to provide additional information if requested by the organization. Qualifying for a grant isn’t easy, but it is well worth the effort to pursue these opportunities.
Once you’ve received your small business grant, keep track of the funds and what they’re being used for with QuickBooks Online . Our accounting software allows you to automate expense tracking and provides access to detailed financial reports. It can also generate financial statements and reports to be shared with grant providers. All around, QuickBooks accounting software is a smart tool to have in your kit when starting and growing your business. With this software, you can save time on accounting and invest more time in key business initiatives.
10 small business grant resources to guide you
If you want more grant-related advice, programs, and mentorship for small business owners, here are 10 more great resources to check out:
- Grants.gov : Grants.gov makes it easier and more cost-effective for applicants to interact digitally with federal grant-awarding agencies.
- U.S. SBA Grant : The SBA works with new and existing businesses to provide grants through federal agencies and offer technical assistance.
- SBIR and STTR America’s Seed Fund : America’s Seed Fund helps startups transform high-risk, high-impact technologies into marketable products and services.
- USA.gov State and Territory Business Resources : This is a state-by-state (and territories) online database to find regulations, resources, and financing opportunities near you.
- State Business Incentives Database : An interactive map of the U.S. detailing incentive programs like loans, grants, tax exemptions and credits, and preferential rates.
- National Association for the Self-Employed (NASE) : NASE Growth Grants fund small business needs through $4,000 micro-grants.
- Small Business Development Centers (SBDCs ): Find and connect with local assistance programs whose mission is to promote entrepreneurship and small business growth.
- Minority Business Development Agency : This federal agency aids the “growth and competitiveness of minority-owned businesses” through grants, loans, private equity, and venture capital.
- Association of Women’s Business Centers (AWBC) : In partnership with the SBA, AWBC offers training, mentoring, business development, and financing to female entrepreneurs.
- The National Minority Business Council : Provides business assistance, educational opportunities, and financial services to small, minority, and women entrepreneurs.
You can also check with your local librarian, your city’s economic development site, or your state’s economic development site. Keep in mind that grants often have very strict eligibility requirements and deadlines. Do your due diligence and make sure to follow the rules so you have a realistic chance of being considered for the grant opportunity.
Small business grants: Frequently asked questions
Do I qualify for a small business grant?
You might. There is such a broad scope of small business grants that there aren’t blanket requirements for which businesses qualify. To find out whether you qualify for startup business grants, you’ll have to do your research into the specific eligibility criteria for individual grants. However, there is always a chance that your small business could qualify for free money, so it’s likely worth exploring potential options.
How much can I receive from a small business grant?
That depends on the grant. There is no set value for how much you can be awarded; each organization sets the award amount for its grants. No matter how much or how little you can get from each grant, it’s still free money.
Are small business grants free?
For the most part, business grants are usually considered part of your taxable income.
If you’re unsure of whether the grant you’ve been awarded should be counted toward your taxable income, consult a tax professional. Otherwise, you may land in hot water with the IRS if you underpay on your taxes. Not only would you then likely be required to pay the taxes you owe, but additional penalties would apply as well. It’s better to be safe than sorry if you’re unsure about your tax obligations after receiving funding.
Whether you’re trying to turn your business idea into a reality or you need financial assistance to grow, grants present an excellent opportunity. Taking the time and effort to apply for small business grants while also trying to run your company can be challenging. However, by taking a strategic approach and doing your research, you can more easily secure funding for your business.