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Guide to Small Business Grants and Where to Find Them

Small Business Grants: Free Money for your Business
Susan Guillory
Susan GuilloryUpdated February 6, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Taking out a business loan or line of credit is one way to get the working capital you need to grow or launch your business. But there’s also another option to consider: a small business grant.Awarded by government agencies, foundations, and corporations, small business grants provide funding to new and existing businesses of all types, and do not have to be repaid. Some grants even come with added benefits like business coaching and mentorships.Because grants are essentially free money, however, they can be difficult to get. Here’s what you need to know about small business grants, from how to find one to how to apply.

What Is a Small Business Grant? 

A small business grant is a lump sum of money awarded to a business or business owner that, unlike a loan, does not have to be paid back. Business grants are offered by federal, state, and local governments, as well as foundations, nonprofit organizations, and corporations. Some grants are targeted to businesses in specific industries or that are developing certain types of products. Other grants are designed for businesses located in underserved communities or are owned by women, minorities, or veterans. In some cases, a grant will come with stipulations about how the money has to be used by the business; in others, there are no restrictions.

Why Consider Small Business Grants?

Grants provide a way to get funding without taking on debt. They also offer funding opportunities for startups that might not qualify for a small business loan. In fact, some grants are available for entrepreneurs who may have nothing more than a great idea for a business. You’ll want to keep in mind, however, that grants typically attract a large number of applicants, and often come with fairly strict qualification requirements. Plus, the application process can be rigorous. You typically need to supply a lot of information and financial details about your business, plus explain how you plan to spend the grant money.Recommended: Small Business Grant vs Loan: 7 Differences 

Where to Find Government Small Business Grants

There are so many different kinds of government business grants available – at the local, state, and federal level – that trying to find the right fit for your business can feel overwhelming. Fortunately, there are some helpful resources and databases that can help streamline your search.The U.S. Small Business Administration (SBA) and other federal agencies list their government grants for small business on Grants.gov. There, you can search based on criteria like eligibility, categories, and funding agency.America's Small Business Development Center, an SBA partner, is a nationwide network of Small Business Development Centers (SBDCs) located throughout the U.S. where new and existing businesses can seek free business consulting and low-cost training. SBDC consultants can also help you find and apply for the right grants for your business.Recommended: Top Small Business Grants in Colorado

6 Private Company Business Grants

Private companies often offer small business grants. Below is a sampling of what’s available, but you can also search “business [industry] grant” online to find more.

1. Visa Everywhere Initiative (VEI)

This global program offers funding to tech-focused startups around the globe. To apply, you need to show how one of your products or services involves Visa products in a creative way. The top award is $100,000, but smaller amounts are also awarded.

2. FedEx Small Business Grant Contest

The FedEx Small Business Grant Contest is designed to help startups grow and scale their companies. Each year, it awards $30,000 to 10 small businesses. To apply, you need to have been in business for at least six months and have no more than 99 employees.

3. NASE Growth Grant

The National Association of the Self-Employed offers a $4,000 grant to qualifying NASE members to help take their businesses to the next level. Grants can be used for marketing, advertising, hiring employees, expanding facilities and other business needs.

4. Fast Break for Small Business

Fast Break for Small Business is a grant offered by LegalZoom, along with the NBA, WNBA, and NBA G League, that focuses on helping businesses in underserved communities. The grant provides $10,000 plus free LegalZoom services; applications are open twice a year.

5. Venmo Small Business Grant

The Venmo Small Business Grant awards 20 small businesses with $10,000, free promotion on the Venmo and PayPal web and social media sites, and professional consulting services. To qualify, you must have less than $50,000 in annual sales and no more than 10 employees.

6. Lenovo Evolve Small Grant

Lenovo’s Evolve Small Initiative is a program that provides funding, mentorship resources, and community support to small businesses located throughout the U.S. and Canada. Each year, the focus and funding amounts of the grant vary.Recommended: Top Small Business Grants in Florida

3 Grants to Start a Business

While many grants are aimed at established businesses, others are designed to provide free money (and sometimes support) to start a small business.

1. The Small Business Innovation Research (SBIR)

The Small Business Innovation Research (SBIR) and its sister program, the Small Business Technology Transfer (STTR), support small businesses with big ideas in technological innovation. The programs not only provide funding to qualifying small businesses but also partner those small businesses with federal research organizations to help develop those ideas into commercialization.

2. The Halstead Grant

The Halstead Grant is specific to a particular type of business entrepreneur — emerging silver jewelry artists. The grant includes $7,500 in funding plus $1,000 in merchandise to start a small business.

3. Challenge.gov

If you’ve got a great solution to an existing problem, you could submit your idea on Challenge.gov. This site is a hub for all prize competitions and challenges across the federal government and leverages crowdsourcing to come up with ideas that turn into businesses.

4 Business Grants for Women Business Owners

Some grants are only open to women who run businesses. Below is just a small selection of the small business grants for women available.

1. Cartier Women’s Initiative

The Cartier Women's Initiative seeks women who are making a difference in the business world. In addition to grants of either $30,000, $60,000, or $100,000, winners also receive business and financial coaching.

2. Amber Grant

WomensNet offers several Amber Grants through the year, including a $10,000 monthly grant, $25,000 annual grant, and quarterly $10,000 startup grant. To be considered for all three grants, you only need to fill out one application.

3. Tory Burch Foundation Fellows Program

This Fellows Program provides eligible women running early-stage businesses with a one-year fellowship that includes a $5,000 grant, workshops, coaching sessions, and network-building opportunities.

4. The SoGal Black Founder Startup Grant

The SoGal Foundation, along with Winky Lux, bluemercury, and other sponsors, offers several $10,000 and $5,000 startup grants to Black women or nonbinary entrepreneurs. Grant-winners also receive fundraising assistance and access to the SoGal Ventures team. Applications are rolling.Recommended: Top Small Business Loans for Women 

3 Grants for Minority Business Owners

Here’s a look at some of the minority small business grants available.

1. Galaxy of Stars Grant

Galaxy of Stars, an online network for minority- and women-owned businesses, offers a grant of $2,500 to eligible applicants to start or grow a business.

2. The Coalition to Back Black Businesses

The Coalition to Back Black Businesses offers $5,000 grants to qualifying black-owned small businesses each fall, followed by mentorship and training. A select few will also receive $25,000 enhancement grants.

3. National Black MBA Association Scale-Up Pitch Challenge

If you have an idea for a Black-owned startup that is scalable, you might want to consider this Pitch Challenge. Sponsored by the National Black MBA Association, the  competition aims to give eligible startups a chance to connect with venture capitalists and other early-stage investors. Three finalists also receive cash awards (up to $50,000).Recommended: Guide to Small Business Loans for Minorities 

COVID-19 Small Business Grants

While many federal, state, and private COVID-19 grant programs are now closed, there are a few local options available here and there.

SBA Grants

While the U.S. Small Business Administration (SBA) is no longer accepting applications for COVID-19 relief grant programs (including EIDL Advance funds), it does offer grant programs aimed at businesses engaged in scientific research and technological development. 

Other COVID-19 grants

There are still some pandemic recovery programs offered at the state and local level. To see what might be available in your area, explore your state’s official websites, including the secretary of state site and the department of economic development site.

How Do You Qualify for a Small Business Grant?

While each grant program will have different requirements for applicants, there are some criteria that many share.If the grant is US-based, applicants may be required to be US citizens. If the grant is state-based, applicants may be required to be citizens of that state or doing business there. Additional requirements for certain grants may also include: 
  • You may only qualify for some grants if you have been in business for a certain period of time. 
  • You may need to operate a for-profit company (or, in some cases, the opposite: a nonprofit). 
  • You may need to have a business in a particular industry.
The key is reading all of the qualification requirements carefully before applying to make sure you meet the criteria before investing too much time in the application process.The process of applying for a small business grant can be time consuming. To set yourself for success, you’ll want to write (if you haven’t already) or refine your business plan. It should clearly explain your business and what sets it apart from other competitors, plus detail what you would do with the grant money. Small business grant applications may also require financial data and other relevant information for your business, so having that information organized and prepared can help streamline the process.Recommended: What are Key Financial Business Statements? 

Pros and Cons of Small Business Grants

Like any type of small business funding, grants come with both benefits and drawbacks. Here’s a look at how they stack up.

Pros

  • You don’t need to repay the money Unlike small business loans, grants do not have to be repaid, so they’re essentially free money. 
  • Information is widely available No matter what type of business grant you’re looking for, there is a lot of information about grants available online.
  • Provides credibility In addition to the funds, a grant can provide more visibility to your business and validate your business idea. It can also make it easier to receive other grants in the future, since you’re already a proven candidate.

Cons

  • Time-consuming Just finding the right grant to apply for can require a lot of research. And once you do, completing the application and making a convincing proposal can take time and effort — and may not result in any returns.
  • Hard to get Small business grants are appealing, so you’re not the only business looking for one. Grants typically receive a large number of applicants, and only few are chosen. 
  • Money may have strings attached Some grants come with restrictions about how you can spend the money. Others require you to spell out your plans for the money in your application; once you get your award, you typically need to stick with that plan.

Alternatives to Small Business Grants

If you don’t qualify for any small business grants (or don’t feel it’s worth the time and effort to apply), you’re not necessarily out of funding options. Here are some other ways you may be able to get the capital you need to launch or grow your business.

Small Business Loans

There are many types of small business loans. For example, the SBA helps businesses in early stages of product development by backing up loans made by partner lenders. While banks typically have strict criteria (such as at least two years of business history and a minimum amount of revenue) for business loans, online business lenders tend to have more flexible requirements. As a startup, you may be able to qualify for a short-term business loan from an online lender. Just keep in mind that rates are generally higher than bank loans.

Angel Investors

Angel investors are high-net-worth individuals who invest in early-stage startups in exchange for equity in the company. Since they invest using their own money, they aren’t beholden to banks or other institutions. This allows them to invest more freely. Typically, when an angel investor funds your company, you also get access to their expertise and industry contacts, which could help you grow your business.Recommended: Pre-Seed Funding vs Seed Funding 

Merchant Cash Advances

If you do business using credit card transactions, you may be able to get a merchant cash advance (MCA) fairly easily. With an MCA, you get a cash advance in exchange for a fixed percentage of future credit card receipts. Typically, the MCA provider automatically deducts a daily (or weekly) percentage of your debit and credit card sales until the advance, plus fees, is repaid in full. While an MCA can be a quick source of cash, this is one of the most expensive types of small business financing.

Small Business Loan Rates from Lantern

No matter where you are on your business journey, there may be a loan available to help you take it to the next level. If you’re interested in exploring your financing options, Lantern by SoFi can help. With our online loan comparison tool, you can access offers from top small business lenders matched to your needs and qualifications with one short application.

Frequently Asked Questions

Which business grants are considered taxable?
How do you get small business grants?
Who can get small business grants?
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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