Small business grants: What they are and how to get them
Grants are a wonderful thing if you’re a business owner or an entrepreneur—afterall, grants are free money that can go toward growing your business (and who wouldn’t love that?). Because of this, it can be competitive or challenging to actually get a grant. With all the rules and regulations, it may seem easier to find mall parking on Black Friday than get approved for a grant.
But fear not, because we’re providing you with some great resources on how to find that perfect small business grant. We’re covering what small business grants are, who’s eligible for them, where to find them, and how to apply for them. By the end of this article, finding a business grant will seem less daunting, especially compared to any precarious parking situations!
What are small business grants?
Small business grants are free money, usually awarded by a government agency or organization, that can be used by an entrepreneur or a business owner to further their businesses. This means a grant doesn’t need to be repaid (cha-ching!). Grants are usually awarded based on specific eligibility requirements, including industry, location, and/or need.
Why are small business grants important?
There are so many good reasons you should care about small business grants, and put effort into finding and applying for them!
Regardless of where you are in your business owner journey, receiving free money to put into your business is always a good thing. They’re particularly great for new small businesses that need money to establish themselves, or businesses that don’t yet have the means to take out loans.
Small business grants vs. small business loans: What's the difference?
The difference between a business grant and a business loan is that a loan needs to be repaid, whereas a grant does not. When you’re applying for a loan, you’ll be judged mainly for your ability to repay it. When applying for a grant, you’ll usually have to submit an application vouching for your qualifications and merit.
How to get a small business grant
Now that we know what a small business grant is, it’s time to get into how to get one. Here’s how to get a small business grant in three steps:
- Look for the right grants
- Gather the right documents
- Start the application process
Keep in mind, finding and applying for the right grants will take time and resources, so be prepared to devote time into the grant application process!
Step 1: Look for the right grants
The first step to getting a small business grant? Looking for the right ones. There are so many grant options out there, so this can be a biiit time consuming. Here’s a taste of the different types of grants you’ll want to look into:
- Grants for minorities
- Grants for veterans
- Grants for women entrepreneurs
Looking for grants can be super overwhelming, so a good place to start is on the local level. Start by researching your city or town, and then tackle your state or region and build your way up. These grants will likely have less competition, and give you an actionable place to start.
There are many small business grants and assistance programs that are specific to particular industry sectors, so it’ll be helpful to narrow your search by looking in your specific industry as well. To figure out exactly where your business fits in the industry classifications, finding its North American Industry Classification System (NAICS) code will make it easier to find government assistance programs available for that particular industry.
Once you figure that out, start searching for specifics. Government hub sites come the closest to providing a full listing of government assistance, including small business grants (but more on that later!).
Step 2: Gather the right documents
The next step in getting a small business grant is gathering and organizing the business documents you’ll probably need for applications—having everything in one convenient place will make it way easier and smoother when it comes time to apply.
The most important document you’ll need to have is your business plan. Your business plan needs to be a) well-written and b) describe your business objectives and strategies, your financial forecasts, and the market you’re targeting.
Your business plan helps you prove that you understand every aspect of your business and its ability to generate profit to the people reading your application, including:
- What’s your product or service?
- Who is your target market?
- Who’s your competition?
- How is your business different from everyone else’s?
This guide to market research will help if you don’t already have the answers to these questions.
You should also make sure you have the following information and reports on hand:
- Personal financial statement
- Employer Identification Number (EIN)
- DUNS number
- Number of employees
- Bank statements
- Tax returns
- Revenue history
- Balance sheet
- Cash flow forecast and cash flow statement
- Income statement
- Accounting ledger
- Supporting documents for taxation, insurance, real estate, etc.
BTW, if you’re a Wave user, a bunch of these important reports are automatically generated in your free Wave account and are super easy to access. You don’t have to worry about creating these documents yourself or digging around for them, which can really slow down your small business grant application process.
Having these reports right in your Wave account also helps you better understand the health of your business, find ways to improve cash flow, show lenders your profitability, and stay organized for tax season. For an overview of all the reports you can find in your Wave account, check out the video below!
Step 3: Start the application process
The third step? Actually applying for the grants you qualify for.
A tip for managing your time better is to create a spreadsheet or document to track the grants you’re applying for, along with their requirements, application fees, and deadlines.
We suggest creating a realistic and manageable schedule for grant research and applications, since applying for grants can be overwhelming! You don’t want to rush the process, or else you might make mistakes that could cost you the grant or waste your time applying for grants you don’t qualify for in the first place.
Most grants will also require a grant proposal in addition to supporting documents, so be prepared. You can check out our article on grant proposals to learn how to write an effective one, and then modify it based on the requirements of each grant to save yourself some time.
Another hot tip: When filling out grant applications, do a little research on the business owner or entrepreneur who previously won and try to find out what made them stand out from other applicants. This can help you shape your own application and assess whether you’d be a good fit for the grant.
Where to find small business grants
In this section, we’re going over the different categories of small business grants you can look into (once you’re done reading this section, you can cross Step 1 off your to-do list!). Take your time reading through the requirements and deadlines for each grant, and then make a list of any promising ones (remember the spreadsheet we mentioned in the last section? This is a good time to bust that out).
Federal small business grants
There are a lot of grants from federal government agencies out there, but here are some great places to start:
- Grants.gov: Use this comprehensive site to learn more about available eligibility and application processes for various grants administered on the federal level.
- Small Business Innovation Research (SBIR): This competitive awards-based program enables small businesses to engage in federal research and development, and awards grants to stimulate high-tech innovations.
- Rural Business Development Grants: This program by the U.S. Department of Agriculture awards technical assistance and training for small rural businesses with fewer than 50 new workers and less than $1 million in gross revenue.
- Program for Investors in Microentrepreneurs (PRIME): This program awards grants to disadvantaged microentrepreneurs.
- Women-Owned Small Business Federal Contract program: At least 5% of all federal contracting dollars go to women-owned small businesses every year as part of this program by the federal government.
State and regional small business grants
Here are some state-based grant portals and resources that you can look into for grant options. Each state will have specific grants available to local business owners and entrepreneurs, so be sure to select the proper state:
- Your local Chamber of Commerce: The Chamber of Commerce has a great repository of small business grants, including their own Dream Big Awards.
- Economic Development Administration: You can search for your state and find local grants and resources for your business.
- Small Business Development Centers: Similarly, your local Small Business Development Center can help find small business grants and other funding support.
- Minority Business Development Agency Centers: The MBDA helps minority-owned small business owners grow their businesses—including through grants.
- State Trade Expansion Program: Through the State Trade Expansion Program (STEP) grant, a small business or an entrepreneur can receive funding to expand into international markets.
- State Business Incentives Database: By clicking on your state, you can see the amount of grants available. Note: This feature is only available to members of the Council for Community and Economic Research, which requires a membership fee.
- Florida grants: Wave’s roundup of grants specific to Florida.
- California grants: Wave’s roundup of grants specific to California.
- Texas grants: Wave’s roundup of grants specific to Texas.
- Ohio grants: Wave’s roundup of grants specific to Ohio.
Corporate small business grants
Corporations and other larger companies can also be a great resource for small business grants. Here are a few options:
- FedEx Small Business Grant Contest: FedEx is offering 10 winners a $30,000 grand prize, plus a ton of other perks. There are some qualifications you have to meet—for instance, businesses can’t have more than 99 employees, and must have shipping and printing needs.
- Small Business Readiness for Resiliency Program: Also offered by FedEx, in partnership with the US Chamber of Commerce Foundation, these grants of $5,000 were created to help small businesses prepare and bounce back after a natural disaster strikes their areas.
- National Association for the Self-Employed (NASE): Businesses that are a member of NASE can apply for a $4,000 grant. Applications are open four times a year.
- Fast Break for Small Business: LegalZoom paired up with the NBA, WNBA, and NBA G League to invest $6 million total toward small businesses. This year, they are offering Black-owned small businesses $10,000 grants and a free LegalZoom product or service valued up to $500.
- Venmo Small Business Grant: Each business owner or entrepreneur will receive a $10,000 grant, public promotion on the Venmo and PayPal websites and social channels, and business resources and professional consulting services.
Local small business grants
Each county, city, and municipality should have small business grants available to small business owners and entrepreneurs. Since each agency on the local level is unique, we can’t make any sweeping statements about what types of grants might be available to you.
We recommend checking out your local grant listings by doing some research and visiting any relevant websites from your local government. You can also check out the SBA's website and visit your local Small Business Development Center.
Additional small business grant options
Here are some more grant options beyond the typical federal, state, and corporate ones.
These grants can be specific to certain demographics or business types, and include grants for startups, minority entrepreneurs, women, and veterans:
- Incfile Fresh Start Business Grant: Incfile is offering $2,500 to go toward business startup costs, along with free formation services from Incfile.
- U.S. Chamber of Commerce Dream Big Awards: For-profit businesses operating for at least one year, with less than 250 employees or gross revenues of less than $20 million, must fall into one of the listed categories to win the $25,000 prize. To stay updated on the latest news and deadlines for this grant, you can subscribe to the U.S. Chamber of Commerce’s newsletter.
- Hello Alice: The Hello Alice website features a ton of different grants for small business owners and entrepreneurs.
- Amber Grants: The Amber Grant, worth $10,000, is awarded every month to a women-owned small business in North America. If you are one of the recipients, you can also apply to another Amber Grant at the end of the year worth $25,000. Keep in mind, there’s a small application fee.
- Cartier Women's Initiative Award: This initiative offers grants between $100,000 and $30,000 to impact-driven women-owned businesses.
- The Second Service Foundation: Their grant program, the Military Entrepreneur Challenge, is a three-part event that helps veterans who lack the financial means to start or grow their small businesses with the chance to win a grant. To learn when applications open, you can subscribe to their newsletter.
Plus, don’t forget to do some good old fashioned Googling! The phrase “small business grants” isn’t always used by everyone, so you can also try searching for these keywords as well:
- Small business financing
- Small business award
- Small business contributions
- Small business shared costs
- Small business subsidies
- Small business rebates
- Small business tax credits (or tax rebates)
- Small business non-repayable loans
These terms may refer to funding that your business doesn’t have to pay back—and that’s exactly what you’re looking for! 🤑
Small business grant FAQs
What can a small business grant be used for?
Small business grants can be used for a variety of purposes—each grant will usually have its own unique rules about what the money can go toward. Some grant programs might let you spend the money however you’d like, while others may place restrictions on the funds and require you to document how you used the money. During the application process, some grants may also require you to lay out how you plan to use the funds.
How do you qualify for a small business grant?
You can qualify for a small business grant by meeting its eligibility requirements. As we mentioned before, each grant is unique and will have its own rules and requirements. For example, a business owner might only qualify for certain grants if their business has less than 10 employees, furthers a social cause, or is focused on scaling their business.
You may be more likely to qualify for a grant based on your industry. Some small businesses are in a grant-rich industry or area, and some industries fit well with government objectives and are targeted for funding. Unfortunately, some fit into neither category.
For example, government grants for retail businesses are notoriously scarce. And there are many more assistance programs for small businesses in certain parts of the country than others. Government priorities (e.g. natural disaster assistance, new regulations/legislation, etc.) will also affect the availability of grants for businesses outside of those areas.
The following list will give you an idea of the types of things an agency or organization is looking for when going through applications:
- Location (e.g. New York, Oakland, etc.)
- Level of government (e.g. federal, state, local, etc.)
- Industry type (e.g. agriculture, technology, tourism, etc.)
- Business structure (e.g. non-profit, corporation, etc.)
- Stage of business (pre-startup, startup, existing, etc.)
- Investment (e.g. 50% contribution from the business itself, etc.)
- Type of activity (e.g. hiring staff, research and development, etc.)
- Demographic group (e.g. youth, women, rural, etc.)
- Availability (e.g. funds available for disbursement, total number of applications, etc.)
- Additionally-specified purposes (e.g. wage subsidy, reduce pollution, export, etc.)
Does the SBA award grants for small businesses?
The SBA doesn’t award grants for starting and expanding a business, but it does award grants to nonprofits, resource partners, and educational organizations that “support entrepreneurship through counseling and training programs.”
For instance, the SBA offers grants for COVID-19 relief programs, research and development, and management and technical assistance.
Going forward with small business grants
We know applying for small business grants can be a bit daunting, but all your time and effort will be so worth it once you score that perfect grant.
Remember to start a document or spreadsheet when researching grants to make your research less overwhelming (keeping hundreds of tabs open is not the way you want to go!). As we mentioned before, a good strategy is to start researching on the local level, and then keep branching out.
Then, set aside dedicated time each week just for applying, and keep track of the grants you’ve applied for using your trusty spreadsheet.
Psst—you can also check out our resources on state-specific grants for small business owners and entrepreneurs:
With so many grants out there, you’re bound to find a great match. Good luck, everyone here at Wave is rooting for you!
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.