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Finance

What You Need to Know About Small Business Grants

April 19, 2017 • 8 min read
Katelyn Peters

Katelyn Peters

Seattle Correspondent

Small business grants help you get free money. Are you sold? While the competition for grants awarded to small businesses is tough (Think: there’s no such thing as a free lunch), if you are lucky enough to receive one, you get all the benefits of a small business loan without having to pay any money back. Given the choice between taking on more debt or getting a grant you don’t have to repay, it’s an offer that’s hard to resist.

Most people need help when they’re starting a small business, especially if it’s their first time opening one. Business credit cards and small business loans are two of the most common options for business financing, each with their own repayment options and interest rates.

The challenge of finding and applying for small business grants can be totally worth the time and effort if you are awarded one. And if you’re a woman, a minority or a veteran, there are more opportunities for you to apply for small business grants.

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While you might still have to search many websites, click on links that don’t exist and wade through government databases that haven’t been updated, here are a few places to begin your search for a small business grant. Free financing for small businesses happens on the federal, state and private-level.

Federal small business grants

Government agencies distribute many grants for small businesses. Most of them are targeted towards a specific industry, for example environmental conservation or child care services. Their application processes can be daunting, although they frequently offer assistance and their intent is to provide opportunities for small business owners to grow.

Grants.gov

Grants.gov is a comprehensive database of grants administered by various government agencies. To find the most relevant grants, click the “Browse Eligibilities” tab in the middle of the home page, then select “Small Business.” Next, select “Grant” under “Funding Instrument Type” on the left-hand side of the page. On Grants.gov, you can also browse financing opportunities for products or services your small business offers.

BusinessUSA

This site uses a questionnaire to help sort relevant grants for your business. Click “Starting a Business?” to complete the questionnaire. Sometimes the options it provides aren’t grants, so be mindful of search results that are actually loans with annual percentage rates.

Small Business Innovation Research and Small Business Technology Transfer

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SBIR and the STTR are grant programs focused on research and development, particularly for technology innovation and scientific research. These grant programs connect small businesses, universities and research centers with federal grants and contracts from 12 different government agencies.

State and Regional Small Business Grants

Economic Development Agencies

Every state has an economic development agency that helps new and established businesses find more financing. They can also help new small businesses secure a location and recruit employees, and point small business owners in the direction of other state and regional grant opportunities.

Small Business Development Centers

Your local SBDC provides support to small businesses and entrepreneurs. Sometimes they are associated with a university in your area or your state’s economic development agency. Not only can your SBDC help you find financing opportunities for your small business, they connect business owners with mentors, provide training on basic business skills, and offer networking opportunities.

Corporate small business grants

Corporations and large companies often have philanthropic branches that offer small business grants. Some of these grants are geared towards nonprofits, although there are occasional grants for smaller, for-profit businesses. Because these grants are usually only available once a year, it is important to keep close track of submission guidelines. Some companies that offer small business grants are: Fedex (Fedex Small Business Grant), Miller Lite (Miller Lite Tap the Future), National Association of the Self Employed, Chase Bank (Mission Main Street Grants) and Lending Tree.

Specialty Small Business Grants

Small Business Grants for Women

Women business owners face challenges when starting or expanding a small business, including access to affordable small business loans. Business grants and financial assistance can help bridge the funding gap. The InnovateHER Challenge is an annual competition hosted by the U.S. Small Business Administration that awards businesses with a marketable product or service that positively affects women’s lives. To participate, you must first enter and win a local InnovateHER Challenge to advance to the national semifinal round. The top three national finalists will win $40,000, $20,000 and $10,000, respectively. The SBA sponsors about 100 Women’s Business Centers nationwide that help women entrepreneurs with business development and access to capital. Depending on what state you live in, some of these Centers lend money directly, while others will help you find other small business grants that you qualify for. The Amber Grant Foundation awards $500 to a different women-owned business with passion and a good story every month, and at the end of every year, one of the grant winners is awarded an additional $2,000. Finally, the clothing retailer Eileen Fisher awards $100,000 to up to 10 women business owners every year who make up at least 51% of their business’s ownership and leadership, and are focused on environmental/social change.

Small Business Grants for Minorities

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Minority business owners also face challenges when starting or expanding a small business. The Minority Business Development Agency is an agency of the U.S. Department of Commerce that promotes the growth of minority-run small businesses by connecting minority small business owners to financial resources, federal contracts and market opportunities. The National Minority Supplier Development Council is a corporate member organization focused on increasing business opportunities for certified minority businesses, offering a variety of financing programs and business advisory services. The SBA 8(a) Business Development Program is designed for socially or economically disadvantaged small-business owners and is a program of the Small Business Association that provides business development assistance, training workshops, and management and technical guidance. The Operation HOPE Small-Business Empowerment Program is designed for entrepreneurs in low-wealth neighborhoods, which often includes minorities, and provides access to small-business financing options, as well as help with setting up a business plan and financial statements, credit counseling and educational resources.

Small Business Grants for Veterans

If you’re a veteran small business owner, the Veterans Business Outreach Center Program is a great place to start. VBOCs provide business training, counseling and mentoring at locations throughout the United States. Boots to Business is a free, three-part education and training program offered by the U.S. Small Business Administration to service members who want to become entrepreneurs. The Institute for Veterans and Military Families (IVMF) is program at Syracuse University that provides education and training for business-minded veterans. The Service-Disabled Veteran-Owned Small-Business Program is a program of the SBA that helps qualifying entrepreneurs obtain sole-source government contracts of up to $5 million. Online lender StreetShares announced a partnership with JP Morgan Chase called the StreetShares Foundation that will provide a total of $10,000 in three monthly awards to eligible veterans, reserve or active-duty members, and military-spouse small-business owners. VetBiz is a website operated by the Department of Veterans Affairs that helps veteran owned small businesses apply to become a certified veteran-owned small business. The Veteran Entrepreneur Portal connects entrepreneurial vets to federal, state and local financing programs, resources and opportunities. The Women Veteran Entrepreneurship Program Grant is offered by the SBA for female veteran-owned businesses. Women Veterans Igniting the Spirit of Entrepreneurship (V-Wise) is a three-part online training program that provides the tools that female veterans need to become successful entrepreneurs.


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