A small business grant is funding offered by a federal, state or local government, or a private entity like a corporation or foundation. The best part? It doesn’t need to be paid back the way a business loan would. While the business grants below usually won’t cover every business expense, they can provide needed capital without putting your company in debt. But because it’s such a sweet deal, there’s plenty of competition and some limits — grants may only be open to certain types of businesses or available in specific regions. Learn here where you should look and how to apply for a small business grant.
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One of the key resources for small business owners to be familiar with when looking for small business stimulus grants is the U.S. Small Business Administration (SBA). The SBA is a government agency specifically created to help small business owners and entrepreneurs. During the COVID-19 pandemic, the SBA is offering small business grants through its Economic Injury Disaster Loan (EIDL) program, in addition to grants for distressed restaurants and venue operators.
This grant is specifically for small businesses and nonprofits that have experienced a loss of revenue due to the coronavirus pandemic. Business owners who received an EIDL advance in 2020 of less than $10,000 — or were denied because of lack of program funding — can apply.
Your company may be eligible for up to for up to $10,000 if it:
Smaller and especially hard-hit businesses may be eligible for up to for up to $15,000 if your business:
If your Targeted EIDL Advance application was rejected you may request a reevaluation by sending an email to: [email protected]
Unlike the Payment Protection Program (PPP) loan, a Targeted EIDL Advance would not need to be repaid. The same goes for the next two grants for live venue operators and restaurant owners.
In addition to the SBA, there are a number of small business grants available from other federal agencies. If you’re new to searching federal agencies for grants, Grants.gov could be a good starting place. Keep in mind, it’s a vast database that might be difficult to navigate, especially those looking for highly specific grants.
Below are some departments and agencies of the federal government that offer specific grants for small businesses.
U.S. Department of Agriculture (USDA)
USDA offers quite a few grants to state and local governments that can filter down to small business owners in rural areas. Direct grants may be available to farmers markets or roadside stand businesses — that’s in addition to direct low-interest government loans to new and family-owned farms.
U.S. Department of Energy (DOE)
The DOE works closely with the SBIR and STTR programs to fund energy research and development at small businesses. There are specific needs those businesses must meet and it’s a competitive field, but there is grant money if you fall into this category.
U.S. Environmental Protection Agency (EPA)
The EPA also offers some specific grants for those businesses operating in the green or environmental sector. These highly sought-after grants often go to government agencies, nonprofits or research institutions working on projects related to air quality and pollution prevention, to name a couple, but those opportunities may then filter down to local businesses.
National Institutes of Health
The NIH holds the title of largest public funder of biomedical research in the world. The application process is lengthy but worth it if you can secure some of the nearly $42 billion the NIH spends on medical research each year. Like some of the other federal agencies on this list, NIH works closely with the SBIR and STTR program to leverage small businesses to support the nation’s health.
State Business Incentives Database
The State Business Incentives Database can be a useful database for business owners. It has a map feature that allows you to select your state and see the number of grants available, as well as information on tax credits and exemptions. It does, however, require a login that members of the Council for Community and Economic Research are granted. A basic membership, which includes access to the database, is $345.
U.S Economic Development Administration (EDA)
Part of the U.S. Department of Commerce, the EDA can be a great resource for small businesses looking for state grants. The EDA works through regional collaboration to drive economic development across the country. It does so by offering grants and working directly with communities.
Small Business Development Centers (SBDCs)
All of the research and work that go into applying for any business grant can be daunting, but the SBDC might be able to help. There are nearly 1,000 development centers across the country where business owners can seek free consulting. These consultants can help you find the right grants for your business.
If you’ve exhausted your options when it comes to government grants, or you’re simply looking for more, look at private small business grants. These grants and awards can come from corporations or private entities looking to help small businesses. Similar to government grants, these private grants and awards come with their own set of application requirements and are sometimes reserved for certain types of businesses or businesses in certain industries.
Shipping giant FedEx annually awards 12 U.S. businesses with a lump sum: $50,000 for first prize, along with $7,500 in FedEx Office print services; $30,000 for the runner-up, along with $5,000 in print services; and $15,000, plus $1,000 in print services, to 10 third-place winners. Entries for 2021 closed on March 9, with winners expected to be announced on May 10.
The National Association for the Self Employed (NASE) awards quarterly $4,000 Growth Grants to its members. Membership starts at $12 a month.
Aimed at women business owners, this one-year fellowship includes training, a peer community, a paid-for trip to the Tory Burch offices and $5,000 for business education. Applicants must already have an operating business. The deadline for 2021 closed in November 2020.
The Visa Everywhere Initiative really is everywhere: North America, Europe, Asia Pacific, Latin America and CEMEA (a large group of countries representing several continents including Africa, Asia and Europe). Business owners from all over the world are eligible for grants that vary by region, as do the application deadlines and timelines for the awards. A overall global winner receives $50,000 on Sept. 14.
Now that we’ve answered the question “What is a grant?”, it’s time to move on to how to apply for small business grants. Keep in mind that every grant will vary — check the requirements of each grant before submitting any applications. The following is a general step-by-step guide you can follow to get started.
Each small business grant has different requirements that applicants need to meet to even be considered for the grant award. Before applying for a grant, be sure to check that you meet the basic requirements of the grant you plan to apply for, including location, business size, industry and match requirements, if any. Some may even require that you have a membership to a specific organization before applying.
Once you know that your business falls into the right category (or categories) to apply for a grant, you’ll want to gather your documents. A business plan laying out why you’re applying for funds and how you plan to use them is most likely going to be a requirement. You may also need the following:
Lastly, you need to fill out the actual grant application, where you’ll likely spend most of your time. These applications typically require small business owners to answer open-ended questions and application complexity can vary depending on where you’re applying to for a grant.
You might need to explain why you need the funds, your plan for the money if you win, the background of your business or how your business contributes to your community. These questions can be technical and specific depending on the grant you’re applying for and they’re an opportunity for you to make sure your application stands out among the competition.
There is one fundamental difference when it comes to business grants and business loans: One will need to be repaid, while the other generally will not. A small business loan needs to be repaid in the agreed-upon time with the agreed-upon interest, and can require some sort of collateral. Business grants, on the other hand, won’t typically need to be repaid. Loans also usually come from a bank or a specific lender, though some institutions, like the SBA, do offer both loans and grants; both types of funding may also have rules about how funds can be used.
While loans and grants do have these stark differences, they can benefit your business equally and might be useful during different times of your business’s lifecycle. Grants might help new businesses get on their feet, while business loans are typically for larger amounts and can be useful to scale your company. Startup businesses may find it difficult to get a loan without at least several months in operation and consistent revenue.
The way you qualify for a business grant will be different depending on each grant. Most grants are aimed at helping to fund a specific part of a community or population.
The SBA grants we’ve covered are specifically aimed at businesses that have been impacted by the COVID-19 pandemic, but there are numerous SBA loans available for all types of companies. A government microloan might be a good alternative, especially for businesses that have struggled to qualify for traditional loans and need relatively small amounts of funding.
Yes, particularly for companies involved in research and development. Your business might be developing a product or service that matches a need in national health, defense, education, transportation or another field.
One of the downsides to small business grants is that they’re in high demand. This means you could end up spending time applying to multiple grants and never see any payoff for it. But if you do have the time to spare and are willing to work for the potential payoff they could be well worth it.