Where to find small business grants

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Business grants are one of the few financing options you don’t have to pay back. But there’s a reason that businesses turn to other types of financing first.

Grants take a long time to find, even longer to apply for — and they’re extremely competitive. Still, they might be worth looking into. After all, free is pretty hard to beat.

Is my business eligible for a grant?

Standard business grants don’t operate like business loans in terms of eligibility requirements, though qualifications for both grants and loans widely vary.

When you apply for a grant, you aren’t just convincing the donor to give you funding — you’re convincing them to give you funding over everyone else who applied. That’s one of the big differences between business loans and grants.

Grants tend to have a larger social cause in mind, such as encouraging women or minority entrepreneurs or helping out a particular community. You can also find grants specific to industries or regions.

Federal grants for small businesses

The US government provides business grants at the federal and state level. Federal grants, however, don’t typically go to small businesses unless they’re involved in technology, development, scientific research or other issues of national concern. If this sounds like your business, you might want to look at two grant programs offered through the Small Business Administration (SBA):

• Small Business Innovation Research (SBIR) program grant. The SBIR grant is designed to move government economic development initiatives into the private sector by funding tech businesses. You can apply to participate in SBIR through several federal agencies, which have their own guidelines.
• Small Business Technology Transfer (SBTT) program grant. The SBTT program is a slightly more rigorous version of SBIR. It’s available to businesses in the technology sector, and you’re required to work in partnership with a research institution if accepted. Like the SBIR, you can only apply through federal agencies.

All grants are competitive, but the SBIR and SBTT grants are especially difficult to get. That doesn’t mean you should write them off, but you might want to also look at other federal grant listings on Grants.gov.

• Eligibility requirements for the SBIR and SBTT grants

  To qualify for either grant, your business must meet the following criteria:

  • For-profit business — unless it’s a nonprofit research institution applying for the SBTT grant
  • Owned by a US citizen or permanent resident, another small for-profit tech business, or multiple venture capital companies, hedge funds or private equity firms
  • No more than 500 employees

  You’ll want to read the eligibility requirements carefully to fully understand the definitions set by the SBA.

State and city grants for small businesses

Small businesses outside of the tech sector might have better luck looking local. State and city grants tend to offer less money, but they’re also less competitive than other types of grants. Because they’re tailored to your community, these grants could have requirements that you’re more likely to fit.

You might want to start your local grant search with:

• USA.gov. This site has a section that provides a directory of small business resources by state, including grants, loans, tax incentives and training programs. It’s worth a look even if you aren’t sure you want a grant — you just might find financing you didn’t even know was an option.
• Your local Economic Development Administration (EDA) office. State and city EDA offices might offer grant opportunities you won’t find on USA.gov. You can find your local Economic Development Administration office on its website.

If neither of these options do it for you, search for business grants on other grant directory websites.

Typically, your business will need to be located in a specific state or city to qualify for a local grant — on top of other grant-specific requirements.

Small business grants from companies

Businesses that don’t qualify for a government grant might want to turn to the private sector.

Many large corporations and national organizations run foundations that offer grants to small businesses, often within a specific type of industry or charitable cause. You might want to start with these four popular ones:

• Chase Mission Main Street. Chase Manhattan Bank awards $150,000 each year to 20 businesses who can tell the most compelling story of their business and its affect on their communities through an essay contest.
• Wells Fargo Community Investment. Wells Fargo offers grants to small businesses in almost every state, with a focus on nonprofits. Small businesses involved in education, environmental conservation, housing, veteran care and disaster relief might want to take a close look at this program.
• FedEx Small Business Grant Contest. Every year, FedEx awards 10 small businesses with grants of up to $50,000 and up to $7,500 in FedEx Office print and business services. To enter, you simply need to answer a few questions about your business, what inspired you to start it and what you’d use the funds for. The contest is then open up to the public for voting.
• National Association for the Self-Employed (NASE) Growth Grants. If you’ve been a NASE member for at least three months, your business may be eligible for a $4,000 growth grant. Applications are accepted on a continual basis throughout the year and reviewed every three months.

Eligibility requirements, as always, highly vary with corporate grants. You generally won’t be able to get a grant if your business is less than six months old. You could also have trouble finding a corporate grant if you run a for-profit business or political organization. However, if you’re a for-profit business that’s involved with charitable activities or works to improve a community, you may still qualify.

Finding a corporate grant

Search engines are your best bet to find a corporate grant. Try searching for grants by industry and your financial needs, rather than corporate grants in general — it’ll take you a lot longer to weed through foundations that can’t do anything for you. For example, if you own a restaurant in Chicago, you could simply search for “restaurant grants Chicago” to quickly narrow your focus.

Didn’t get the grant? Compare business loans instead

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First Down Funding business loans			$4,000 – $300,000	5.49% to 22.79%	At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 300	Alternative financing up to $300K with highly competitive rates.	Check eligibility More Info		loading Fetching your data...
Lendio business loans			$500 – $5,000,000	Starting at 6%	Operate business in US or Canada, have a business bank account, 560+ personal credit score	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...
OnDeck small business loans			$5,000 – $250,000	As low as 9.99%	600+ personal credit score, 3+ years in business, $100,000+ annual revenue	A leading online business lender offering flexible financing at competitive fixed rates.	Check eligibility More Info		loading Fetching your data...
Fundbox business loans			$1,000 – $100,000	4.99	You must have an established business.	Get flat rate, short-term financing based on the financial health of your business, not your credit score.	Check eligibility More Info		loading Fetching your data...
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Fundera business loans			$2,500 – $5,000,000	7% to 30%	$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years	Get connected with short-term funding, SBA loans, lines of credit and more.	Check eligibility More Info		loading Fetching your data...
LendingClub business loans			$5,000 – $500,000	9.77% to 35.98%	12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better	With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.	Check eligibility More Info		loading Fetching your data...
Monevo business loans			$500 – $100,000	3.99% to 35.99%	Credit score of 500+, legal US resident and ages 18+.	Use this connection service to get paired with a loan you can use for business.	Check eligibility More Info		loading Fetching your data...

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Bottom line

Finding free funding for your business isn’t impossible. But make sure you’re ready to invest the often intensive time and resources in researching and applying for grants.

If you want your money more quickly, consider other business financing options. In fact, some lenders specialize in financing for women business owners, offer special loan programs for minority-owned businesses or cater to businesses started by veterans.

Frequently asked questions

• What's the difference between a small business loan and grant?

  A small business loan is money you borrow from a lender that you have to pay back with interest or other fees. On the other hand, a small business grant is funding you don’t have to pay back that’s typically offered by the government, foundations or corporations.

• Does my startup qualify for any small business grants?

  Some organizations offer small business grants for startups. You’ll need to review the grant’s criteria to determine if your startup qualifies.

• Can I use a grant to start a new business?

  Not typically. Most grants go to businesses with a track record, so you might want to look at other options like crowdfunding or personal loans if you need funding to start a business.

• Will my credit score affect my grant application?

  Not typically. You aren’t paying back your grant after all, so there’s no reason your credit history should affect your eligibility. It doesn’t hurt to double-check with the provider of the grant if you’re concerned about the impact it will have on your credit score.

• Do I have to pay taxes on my small business grant?

  Yes, grants are generally treated as taxable income. There are some exceptions, however. If you receive a grant, consult a tax professional to learn whether you’ll need to pay taxes on the funding you receive.