Grants for small businesses are a treasure that most small business owners seek. They are offered by various government agencies, local governments, banks, lenders, and organizations. Because grants do not require you to repay them, they are highly sought after as a source of funding for startups and emerging small businesses.
There are many small business grants offered by a number of different provider types. Grant offerings are not always consistent from one year to the next. This means a grant that is available this year may not be available next year. Plus, a new grant may emerge that has never been offered before. We have identified the top nine small business grants that are available for 2019.
9 Top Small Business Grants 2019
|Small Business Grant||Who & What It’s Best For|
|SBA Small Business Innovation Research & Technology Transfer||For-profit entrepreneurs employing less than 500 people.|
|IdeaCafe||Startup businesses with innovative ideas.|
|National Association of the Self-Employed||NASE members.|
|FedEx Small Business Grant||Businesses with less than 100 employees.|
|USDA Rural Energy for America Program||Rural small businesses needing energy efficiency upgrades.|
|USDA Value-Added Producer Grant||Agricultural and rural small businesses.|
|Wells Fargo Community Investment||Businesses organized as a 501(c)3.|
|Amber Grant||Women entrepreneurs.|
|StreetShares Commander’s Call Veteran Business Award||Veteran-owned businesses.|
What a Small Business Grant Is
A small business grant is a small amount of money given to a small business by another entity without the expectation or requirement to repay the funds. Grant funds typically come from federal or state governments, or other nonprofit organizations. Grants are often competitive and are offered to foster growth in an intended industry or sect.
How Small Business Grants Work
You’ve scoured the internet to find the perfect grant for your small business, now what? Once you have located the grant you want to apply for, the next step is to read through the instructions and apply. Your application will compete against other applications for the same grant. If you are selected, you’ll receive the funds.
Depending on the source of the grant, and the restrictions and requirements that go along with the funding, you may be given a grant agreement to sign before receiving the grant money. This grant agreement is much like a promissory note that you would sign if you were taking out a loan. The grant agreement will list any restrictions for the use of the funds, and any requirements expected of you as the recipient of the grant.
Some grants (especially those that are directly from a government entity) require that you report certain details back to the grant provider by pre-determined dates. Failure to meet the requirements could result in you having to pay the grant back, so it’s important that you read and fully understand the contents of the grant agreement when you sign it.
Where to Find Grants for Small Businesses
Grants for small businesses are available from a number of different sources. The federal government offers a wide variety of business grants through an array of federal agencies. State and local governments often offer grants to help spark economic growth, while lenders and other businesses offer grants to help reinvest in their communities.
Small business grants can come from a variety of sources, such as:
- Federal government: There are a number of grants offered by the federal government for various purposes. Availability of these grants is not always obvious or advertised. The best place to find Federal grants is directly through Grants.gov, which lists and provides application requirements for all Federal grants.
- State government: Some states offer grant opportunities to residents to help foster small business development in that state. These grants vary by state, and the specific agencies to contact also vary. You can contact your local state government to find out what grants are available.
- Local government: In an effort to foster community economic development, many local governments (e.g., cities, towns) offer grants. These local grants may also be offered through area nonprofits that share the mission of community development. Your local government office should be able to provide you a list of agencies to contact.
- Lenders: Many national banks, and some smaller regional or local banks, offer grants to small businesses and others. These grants are often offered as part of the bank’s Community Reinvestment Act program, which is a way to give back to its local community. The best way to find these grants is to contact your local banker of economic development organization.
- Other businesses: Some businesses (e.g., FedEx) and nonprofits offer grants to small businesses. These grants are often competitive and smaller in size than some of the other grant types.
Once you have reviewed the various entities that offer grants including minority-owned small business grants, and have found a grant you may be eligible for, the next step is to apply for the grant. Grant applications vary by source and grant type, so it is important to understand exactly what is required to apply.
The nine top grants available for small businesses are:
1. Small Business Innovation Research Grant & Small Business Technology Transfer Grant
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs were established to stimulate technological innovation through shared research and development between small businesses and larger research institutions. Both the SBIR and the STTR programs provide funding throughout a three-phase process. Awards for the first phase (feasibility and proof of concept) do not typically exceed $150,000. Second phase (the objective) awards do not typically exceed $1,000,000.
Being a Federal Grant, there are a number of requirements that your business must meet to be eligible.
To be eligible your business must be:
- A for-profit business
- Operating within the United States
- Legally set up as an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust, or cooperative
- At least 50% owned or controlled by United States residents
- Employing no more than 500 employees
The SBA provides a detailed list of the eligibility requirements with a thorough explanation of each of the requirements, as well as pertinent definitions. To find the current deadline and application requirements for either the Small Business Innovation Research or Small Business Technology Transfer grants, you can search for either program at grants.gov.
2. IdeaCafe Grant
IdeaCafe offers a $1,000 grant to small business owners. IdeaCafe is looking for grant applications from businesses that have innovative business ideas. The grant opportunity is open to current business owners, as well as those that are still in the planning phase of starting a new business.
Applying for this grant is simple, and is completed through a form on the company’s website. To enter, you need to register for membership to the site, which is free. Once you have entered, your business pitch will be shared with the IdeaCafe community, where users vote for the final winner.
3. National Association for the Self-Employed Grant
The National Association for the Self-Employed (NASE) offers Growth Grants of up to $4,000. To be eligible, grant recipients must be micro-businesses. Grant proceeds can be used to help your business market, advertise, expand, and hire employees. Since 2006, the NASE has awarded nearly $1,000,000 through its Growth Grants program.
To be eligible for a small business grant from NASE, you must:
- Be a member of NASE
- Have a business need that could be fulfilled by the grant
- Explain in detail how you will use the grant proceeds
- Describe how receiving the grant will improve your business
- Provide résumé and business plan
To apply for this grant you must be a member of NASE. The cost of a NASE membership varies depending on the enrollment level that you select. Monthly membership costs start at $12 per month. Once you have become a member, you will have access to the online grant application to apply for the grant.
4. FedEx Small Business Grant
FedEx offers small business grants through a small business grant contest. There are 10 grants available, ranging from $15,000 to $50,000. To be eligible for this grant the entrant must be at least 18 years old, you need at least six months of business operations, and you cannot have more than 99 employees.
The basic requirements for the FedEx Small Business Grant are:
- You must be at least 18 years of age
- Your business must be currently active and have all required licenses and registrations;
- Your business must have between 1-99 employees on its payroll
- Your business must have at least six months of business operations
To enter the contest for a FedEx small business grant, applicants will need to visit the contest website and submit an entry. Your entry will require short answers to a few questions about your business, including an elevator pitch, what makes your business stand out, and how you would use the grant funds.
You will also need to provide basic information, such as your business name, address, and contact information. Additionally, while it is not required, you may submit a video up to 90 seconds in length to accompany your application.
5. Rural Energy for America Program Grant
The United States Department of Agriculture offers Rural Energy for America Program (REAP) Grants to agricultural producers and rural small businesses. These grants can be used to purchase or install renewable energy systems, or to make energy efficiency improvements. Grants range from $1,500 to $500,000, depending on the intended use of funds.
REAP grant applications are competitively funded. All applications are ranked and scored based on a pre-described scoring criteria listed in federal regulations pertaining to this program. Scoring criteria for these USDA grants can be found in federal regulations governing this program. The higher your application scores based on these factors, the greater the likelihood that your grant will be funded.
6. Value-Added Producer Grant
The USDA’s Value-Added Producer Grant (VAPG) program offers grants up to $250,000 to help agricultural producers enter into value-added activities related to the processing and/or marketing of their products. These grants are open to independent agricultural producers, agricultural producer groups, and cooperatives of farmers or ranchers.
Value-added products are defined by the USDA as having:
- A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam).
- The production of a product in a manner that enhances its value (such as organically-produced products).
- The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity-preserved marketing system).
Applicants must be agricultural producers or farmer/rancher cooperatives. The applicant producer(s) must supply at least half of the commodity needed for the project and demonstrate that the project will expand the customer base and increase revenues. Application information can be found on the website.
7. Wells Fargo Community Investment Grant
Wells Fargo offers a community investment grant to community-based nonprofit businesses. The goal of these grants is to help strengthen and revitalize communities. Specific grant opportunities and requirements vary by state. Wells Fargo aims to align the requests of the grant recipients with the bank’s giving priorities. Requests that most closely match those priorities are more likely to be funded.
To find out the specific grant opportunities and requirements available in your state, and to apply for a grant from Wells Fargo, you can visit the Wells Fargo community giving page of its website. Once on the page, select your state to review Wells Fargo’s giving priorities for grants and to view eligibility requirements.
8. Amber Grant: Best Grant for Women-Owned Businesses
The Amber Grant Foundation offers one $2,000 grant each month to a woman-owned business. Each monthly winner is then eligible to be entered into a competition to receive the foundation’s $25,000 annual grant. The application for the Amber Grant is a simple online form, and the advisory board offers tips at the top of the form.
There is a $15 application fee for this grant. The application fee helps to fund future grants, and cover administrative costs for the foundation. The website has a thorough frequently asked questions section that explains what the application fee is used for, as well as answering a variety of other questions about the grant process.
9. StreetShares Commander’s Call Veteran Business Award: Best Grant for Veteran-Owned Businesses
Annually, The StreetShares Foundation provides veteran business award grants to veteran-owned small businesses. Award amounts range from $10,000 for third place, to $15,000 for second place, and the first place winner is awarded $25,000. To be eligible, applicants must be at least 21 years of age, a veteran of the U.S. Armed Forces, and own at least 51% of the business.
You can apply for the StreetShares veteran small business award online. The application process involves three steps. The first step is to download its resource guide for veteran-owned small business. Step two is to review the information on its blog, and step three is to apply.
The StreetShares Foundation will review your submission and judge your application. Your application is judged based on your business idea, the social impact of your business on the military community, the customer needs that you are filling, your company history, and your intended use of the grant proceeds.
Other Notable Small Business Grants from the Federal Government
We’ve listed the most common small business grants provided by the federal government. However, there are many more that are less common, and very specific with regard to who is eligible. Grants.gov lists over 1,000 grants that are open to small businesses. Likely, many will not fit your business, but some may.
For example, if you operate a business that is aimed at protecting wildlife, the Fish and Wildlife Service offers a grant of up to $100,000 to help aid in combating wildlife trafficking. Or, maybe your business specializes in artificial intelligence, and could use the $3,000,000 research and development grant offered by the National Institute of Justice to develop artificial intelligence that can be used as a community resource for re-entry of offenders into communities.
How to Apply for a Small Business Grant
Most grant providers will tell you what you need to do to apply for their grant, and what documentation you need to include. Depending on the grant that you are applying for, it could be as easy as answer a couple of short questions about your business on a website, or as difficult as putting together a mountain of business documents with pro forma budgets, appraisals, and market studies.
To apply, follow the directions provided by the grantor. If the task seems too difficult or confusing, you may want to consider contacting your local SCORE office to set up an appointment. The SCORE advisers can help you navigate the process. If you are applying for a Federal or State grant that has a substantial and detailed application, you may also consider hiring a grant writer to ease the administrative burden of applying.
Tips to Increase Your Chances of Getting Small Business Grants
Finding a grant that you qualify for and completing the application process can often be a daunting task. As soon as you realize that a small business grant would be ideal for your business you should begin looking into your options. Allow yourself plenty of time to complete the application, and be sure to submit your application on time.
Some tips to increase your chances of getting a small business grant are:
- Start looking early and look often: Grant opportunities seemingly appear out of nowhere sometimes. A local agency may receive a community development block grant, and suddenly be offering small business grants in your community. Start your search as soon as possible. If there isn’t anything today, there may be something tomorrow.
- Allow yourself plenty of time to complete the application: Once you have found a grant that you want to apply for look for the application deadline. Allow yourself adequate time to fully prepare your application before the deadline.
- Consider seeking assistance with your application: You may find that the application process for a grant is too daunting, or you may have questions about how to complete the application. If you need help you can contact your local SCORE office for assistance, or hire a grant writer.
- Recheck the requirements: Before submitting your application, review the application requirements a final time to make sure you have included all of the required documents.
- Submit your application on time: Don’t miss the deadline. Missing the deadline will automatically cause your application to be rejected.
How to Keep Your Small Business Grant
Being awarded a grant and receiving the funds is not always the end of your grant journey. Many grants, especially those issued by Federal or State Governments, have additional requirements that you must continue to meet after the grant has been issued. Be certain that you understand any stipulations that accompany the grant offer that you have received. If you miss a requirement, you may have to repay the grant.
Some tips for meeting your grant obligations are:
- Read your grant agreement: Your grant agreement will tell you all of the terms and conditions that you need to meet in order to avoid having to repay the grant.
- Clarify any terms you are uncertain about: If there is anything in the grant agreement that you don’t understand, seek clarification from the grant provider. If you are not certain that you will be able to meet all of the requirements, you may choose to decline the grant.
- Keep track of any requirements and deadlines: Some grants require you to report certain information back to the grant provider within a specific timeframe. Missing a reporting deadline could negate your grant agreement.
- Only use grant funds for their intended purpose: The use of grant funds may be limited to only a certain purpose. If this is the case with the grant that you received, you will want to keep detailed records of how the grant funds were used, and only use them for the intended purpose.
Pros & Cons of Small Business Grants
There are advantages to small business grants, the most important of which is that grants are essentially free money for your business. Beyond that, grant opportunities can be found quite easily by searching online, and are available from a variety of different sources. However, grants are often very competitive and qualifying can be difficult. Plus, you need to be mindful of application deadlines.
Pros of Small Business Grants
Some of the benefits of grants for small businesses are:
- Grants do not need to be repaid: In general, a grant is free money for your business. Unlike a loan, there is no repayment necessary, provided you meet the requirements set forth in your grant agreement.
- Grant opportunities can be found easily online: With the power of the internet, it is now easier than ever to find and apply for small business grants. Many grant opportunities allow you to complete your application online. Plus, there are websites like grants.gov that house hundreds of available grant opportunities.
- Grant funding is available from a number of sources: There are a variety of different grant opportunities available for many different business needs. If you don’t qualify for one grant, there are likely others available that may fit your needs.
Cons of the Small Business Grants
Some of the difficulties of small business grants are:
- Grants can be difficult to obtain: Many grants, especially grants offered from the federal government have strict qualification requirements. If you don’t meet all of the requirements, you will be ineligible for the grant. Pay special attention to all the grant requirements before you apply.
- Grant opportunities are often competitive: Because grants are a free source of money, they are highly sought after. Unlike a loan, where you are evaluated on your financial ability to repay, grants have you competing with other businesses for funding. The more competition you have, the more difficult it becomes to receive the grant.
- Grants often have specific application windows: Most grant opportunities only arise once a year, and have a defined period during which applications are accepted. If you miss the application window, you will have to wait until it becomes available again in the next year.
Grants are a great opportunity to get the funds that your small business needs, if you can get them. Depending on the grant, the application process can be challenging, and the competition could be fierce. If you don’t want to deal with the hassle of applying for a grant, and waiting to find out if you were selected as a recipient, you may want to seek an alternative source of funding for your business needs.
Alternatives to Small Business Grants
Applying for a small business grant does not mean that you will get one. If chasing down a small business grant doesn’t appeal to you, there are other sources of funding for your business. Small business loans or personal loans can often provide you with the funding you need. If you are looking for a more significant funding source, you may want to consider applying with an angel investor or venture capital firm.
Some alternatives to grants for small businesses include:
Small Business Loan
Small business loans come in various forms, and can be obtained through either a traditional bank, or through an online lender. There are even lenders that will lend based on your online marketplace receivables. SBA startup loans are government-backed and come with long term and low rates while online lenders have relatively lenient qualification requirements and simple application processes.
Small Business Credit Card
If your business needs funding of less than $10,000, a small business credit card can be a relatively cost-effective way to finance your business expenses. Many business credit cards offer introductory periods with 0% APR, as well as valuable cashback or rewards programs. These rewards can be beneficial for your business if you utilize credit cards regularly. A business credit card can serve as a quick source of funds, and is a common financing tool for small businesses.
Personal Loan for Business
A personal loan for business can provide your business the funding it needs. Personal loans are based on your personal credit, and therefore do not require business plans and projections. As an example, if you’re a homeowner with some equity in your home, you may be able to get a home equity line of credit (HELOC) to use toward your business.
Angel investors are individuals who provide your business money in exchange for an equity stake in your business. Because angel investors are providing their own personal money, they are investing as much in the business owner as they are in the business itself. An angel investor will want to be confident in the ability of your business to succeed.
Venture Capital involves raising money from individuals and firms that invest in high growth, high-risk companies. Because these investments in new companies are higher risk, investors require a larger return on their investment than a bank would to get a loan. In exchange for their investment, venture capitalists require an equity stake in your business and some measure of control over decision-making.
Small Business Grants Frequently Asked Questions (FAQs)
Can I get a grant to start my own business?
There are some grants that are available to startup businesses. Whether or not a grant would be sufficient to fully fund your business startup depends on the type of business that you are starting, and the amount of funding you need. Grant amounts vary by grant type and source.
Do you have to pay back a small business grant?
If you receive a grant, there is no expectation that you will repay the funds you receive. Grants are essentially free money, with no repayment required. However, there are exceptions to this, as some grant agreements stipulate that you must meet certain requirements. If you fail to meet those requirements, the grantor may require you to repay the funds.
How can I get money to start a small business?
There are many ways you can fund your startup business. With a startup business, your ability to borrow funds will often be based on your personal credit. You may consider a home equity loan, a rollover for business startups to utilize your retirement savings, a business credit card, or a personal loan for business purposes.
There is a multitude of grant opportunities available for small businesses. Some are very niche-oriented, while others are open to the masses. Grants are available from various federal and state agencies, lenders, and other businesses. To find a grant for your small business, put your best effort into the application and rejoice when you get funded (or have a backup plan for funding if you don’t get the grant).