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Small business grants, available from federal, state and private sectors, offer a source of capital for entrepreneurs looking to grow their businesses.
Not every entrepreneur has the means to self-fund their business, and taking out a loan or seeking investment capital may not always be feasible or desirable. That’s where small business grants come in.
A grant — a capital injection that doesn’t need to be repaid — can come from federal, state or private sources. Businesses that qualify for and are awarded grants can get the financial assistance they need to take their companies into the next chapter of success.
Check out our curated list of top small business grants and how to apply for them to secure funds for your business.
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A business grant is money provided by private or public sources to help small businesses grow and develop. Grant funding is often awarded through a small business contest in which eligible business owners apply for consideration. Grants differ from business loans in that grants don’t have to be repaid, and business owners don’t have to give up a stake in their venture.
“Small business grants provide capital that does not dilute your equity, allowing entrepreneurs to scale responsibly without added financial strain,” said Swapnil Shinde, CEO of Zeni, an AI-powered financial services company.
Many small business grants are based on factors such as an entrepreneur’s demographics, geographical location, income, business type and other qualifications. Some grant programs are designed to support underrepresented groups, such as women, minorities and veterans, while others target companies in specific industries, such as science, technology and medical fields. There are also non-monetary business grants that provide free training and technical assistance to low-income entrepreneurs.
Because grants are essentially free money, they are rarely easy to obtain and typically have many stipulations.
“Grants often come with strict eligibility criteria and specific restrictions on how the money can be spent,” said Mark Valentino, head of business banking at Citizens.
The following are highly sought-after federal grant opportunities for small businesses. The programs are competitive, have strict eligibility requirements and are narrowly focused on specific industries.
If these grants don’t suit your venture, try searching on Grants.gov, a comprehensive database of government-backed funding with thousands of available opportunities across various sectors.
The Volpe Center, the U.S. Department of Transportation’s (DOT) systems center, is a federal resource that accepts solicitations for financial aid once per fiscal year. The organization seeks funding for proposals that may enhance the DOT’s ability to execute its mission or that otherwise deliver innovative concepts.
The U.S. Environmental Protection Agency (EPA) awards more than $4 billion annually in grants and other assistance agreements to help small nonprofits and even state governments achieve their environmental goals.
The National Institutes of Health (NIH), a subset of the U.S. Department of Health and Human Services, offers grants for small businesses researching and developing biomedical technologies. NIH has hundreds of distinct funding opportunities and regularly updates its grant database.
The National Institute of Food and Agriculture (NIFA), a branch of the U.S. Department of Agriculture, supports research, educational and extension efforts in several rural areas related to agricultural and behavioral sciences. The fields include food science, animal life, farming and ranching, business and economics, and plant life.
The National Institute of Standards and Technology (NIST), a nonregulatory agency of the U.S. Department of Commerce, gives small business grants to startups researching and developing technology in fields such as advanced communications, artificial intelligence, bioscience, nanotechnology and neutron research.
The Small Business Administration’s SBIR and STTR programs — collectively known as America’s seed fund — help connect small businesses focused on tech innovation and scientific research with federal grants. To qualify, you must be a for-profit business with 500 or fewer employees (nonprofits are ineligible).
SBIR and STTR grants are structured in three phases. Phase I awards up to $275,000 for six to 12 months, while Phase II awards up to $1.8 million for 24 months. Phase III supports commercialization, but it doesn’t provide direct funding.
The U.S. Department of Energy’s Office of Science participates in the programs and provides funding to support energy production, energy use, fundamental energy sciences, environmental management and defense nuclear nonproliferation.
The following resources and business grants for minorities can help you start and grow a business successfully:
Veterans who want to transition into entrepreneurship should consider the following grants and resources for veteran-owned businesses.
If you’re considering applying for a small business grant, follow these best practices to give yourself the best chance to stand out and secure funding.
Valentino advised researching and identifying grants that align with your business goals and eligibility. Grantors usually have a specific type of business or business owner in mind and want to ensure that their funds are used in ways that align with their vision for the grant program.
“Eligibility checks can save precious time and prevent you from focusing on grants that [don’t] truly support your business goals,” Valentino said. “Ensure that your intended use for potential grant funding will be aligned with the mission of the grantor. Only then should you move forward with an application.”
Once you’ve found a grant you qualify for, take time to understand the program’s requirements, including any financial documentation you may need to submit.
“Business owners should do their homework and … research the grants they are applying to, so they have a better knowledge base before submitting,” Shinde said.
Valentino suggested seeking feedback from advisers or previous grant recipients to ensure your application aligns with the grantor’s requirements. He also emphasized the importance of finalizing and submitting your application on time to avoid missing the program’s deadline.
Just like a job-seeker may tweak their resume and cover letter to better align with a job description, Shinde advised tailoring your applications to the grant goals to give yourself the best chance of getting approved.
Valentino agreed, adding that you should showcase your business’s successes and potential for growth in the application.
“Clearly define your project objectives and the impact it will have on all stakeholders — owners, employees, customers and the community,” Valentino said.
Simone Johnson contributed to this article.