Free money to start a small business — isn’t that each entrepreneur’s wildest dream? It’s bad that startup grants are extremely hard to come by. You can imagine business grants as kind of like scholarships for adults. Just as with a scholarship, you need to convince the grant-issuer that the) you'll place the funds to get affordable use, and b) you're more worthy of the cash than other applicants.
There are lots of types of business grants offered by myriad organizations, both private and public. As you may figure, eligibility requirements vary for different grants. Generally, though, only certain kinds of private companies are entitled to grants. These could include economically disadvantaged business people and companies that add value to their local neighborhoods. There are also grants for innovative businesses breaking new frontiers that benefit society — think green tech startups, doctors, and scientists.
In this informative article, I’ll talk about the kinds of businesses that might be eligible for a a startup grant and give a few examples of organizations that provide grants to those businesses. Plus, I’ll give you some suggestions to assist answer the question of: “How do you get free money to begin a business?”
What Type Of Startups Are Qualified For Grants?
Not all startups are qualified for business grants. Organizations running grant programs wish to purchase businesses that truly deserve funding and will put the grant money to get affordable use. Usually, with regards to privately owned, for-profit businesses, your company must belong to a specific industry, and also you must have already demonstrated that your business has a strong possibility of growth. For instance, maybe you have developed an innovative app or service that already has a growing subscriber base.
There will also be startups grants to help businesses and nonprofits that will have a positive effect on their community or on society in general—for example, you may be entitled to a startup grant if you have designed a service or product that helps women, or if you own a sustainable, green business.
Finally, you might qualify for a startup grant should you belong to some marginalized group and have an economic disadvantage that makes it harder to get ahead—for instance, you are a disabled veteran, you have a Black woman-owned business, or perhaps your business continues to be financially influenced by COVID or another disaster. These grants try to “level the playing field” to lift entrepreneurs owned by demographics which have traditionally been excluded from business financing, as well as those who have experienced personal hardship.
If none of these categories really describes your startup, you might need a startup loan to fund your company. In this instance, read Small Business Startup Loans: Your 8 Best Options.
Grants By Business Type
Grants usually have a narrower scope than loans, and therefore each grant is usually for a specific kind of business or purpose. “Type,” however, can refer to anything from specific industries to localities, the demographics from the business owner, or to a specific problem the grant is attempting to deal with.
Let’s check out some of the more prevalent categories.
Innovation
Many startup business grants are for innovators and companies that create novel, potentially disruptive products. These grants are usually for entrepreneurs in technology, medicine, science, agriculture, education, and research and development. Here are a few grants you might be eligible for a in case your business falls into this category.
Innovation grant resources:
- Grants.gov: A useful site for finding any type of grant. However, the majority are for businesses and nonprofits in science, medicine, and research and development. Look for grants on grants.gov or check your eligibility to try to get a grant from the authorities.
- Small Business Innovation Research (SBIR): This SBA-powered seed fund program awards grants of up to $150K in Phase I of funding. Depending on the results achieved after six months, recipients may receive up to $1 million over the next two years (Phase II). Phase III, when applicable, requires the commercialization from the product you’ve developed.
- The US Economic Development Administration (EDA): The US Economic Development Administration is really a bureau within the US Department of Commerce that focuses on sustainable job growth through regional investment and strategy. The bureau provides a quantity of grants for businesses, with a few targeted at research and development. Startups operating in economically distressed areas could also have some additional opportunities here.
Green Businesses
There are some public and private grants for green businesses, including startups. Generally, these grants cover the price of installing sustainable infrastructure and/or energy systems. A few examples include:
- Rural Energy For America Program: As area of the USDA (US Department of Agriculture), the program awards renewable energy and efficiency grants. Grants are awarded to agricultural producers and rural small businesses for alternative energy systems or energy efficiency improvements.
- Database Of State Incentives For Renewables & Efficiency (DSIRE): Operated by N.C. Clean Energy Technology Center and funded by the US United states doe, DSIRE keeps an energetic database of green energy incentives across the nation. Since most green energy grants are offered at the state level, it’s an excellent resource for locating grants in most 50 states.
Rural Businesses
Various grants try to stimulate the economy in rural and economically distressed areas. These grants actually attract new business organisations to struggling regions. Based on where you are opening your business or nonprofit — and the more knowledge about your organization’s goals — you may be eligible for some of this grant money.
- Rural Business Development: This USDA grant is especially for nonprofit and public entities. From the same agency, rural farmers/agricultural producers may be eligible for the worth Added Producer grant. For-profit companies that provide education or healthcare to rural areas through telecommunications may be entitled to the length Learning and Telemedicine grant.
- US Economic Development Assistance Grants: The EDA supports development in economically distressed areas of america by fostering job creation and attracting private investment. Specifically, underneath the Economic Development Assistance program’s (EDAP) Notice of Funding Availability (NOFA), EDA can make construction, non-construction, and revolving loan fund investments underneath the Public Works and Economic Adjustment Assistance (EAA) Programs. Interested? Take a look at the EDA’s grantee resources.
Women-Owned Businesses
There are a number of business grants you are able to qualify for as female entrepreneur. Additionally, some grant money would go to companies that create solutions that benefit women and families. In case your startup is woman-owned, you might qualify for grants for example:
- Amber Grants
- Cartier Women’s Initiative
- Tory Burch’s Foundation Fellows Program
- Women Founders Network Fast Pitch Competition
- Women Who Tech
- IFundWomen
You can see about some of these grants in-depth in our The Best Business Grants For Women feature.
There’s a little more to business grants for ladies:
Nonprofit Organizations
Nonprofit startups which have 501(c)(3) status with the IRS qualify for many government and private grant money. Actually, you’re more likely to become awarded a grant should you run a nonprofit organization, as opposed to a for-profit business.
There are tons of grants for nonprofit organizations. Here are some places you can find them:
- Grants.gov
- Candid
- Grant Gopher
- GrantWatch
- Walmart Local Community Grants
You can read about some of these options in-depth within our Find The following Grant For Your Nonprofit Through One Of These 7 Resources feature.
Veteran-Related Businesses
Veteran business grant money includes retraining grants for veterans returning to civilian life and grants to nonprofits providing services to veterans. Some good places to begin looking for grants for veteran-related businesses include:
- National Association For that Self-Employed Growth Grants
- FedEx Small company Grant Program
- USDA Rural Business Enterprise Grant Program
- VetFran
You can read more about these resources in our The Best Business Grants For Veterans feature.
Minority-Owned Businesses
The more active categories of grants are the ones targeted at companies that are at least 51% owned by a person considered a minority. Some of these are scoped broadly to mean “anybody who isn’t a non-Hispanic white,” while some are more directly targeted at their target demographics (e.g., Asian American, black, Native American).
Some potential grant sources for minority-owned businesses include:
- Dare To Dream Grant Program
- Native American Business Development Institute
- Office Of Minority Health Grant Programs
- Opportunity Grants
You can see much more about these resources yet others in our The Best Business Grants For Minorities feature.
Businesses Impacted by COVID
PPP and EIDL grants are no longer available, but there are still many public and private programs dedicated to assisting smaller businesses that have been negatively affected by COVID. Here are some examples:
- Fiserv + Clover Back2Business Grant Program
- The Barstool Fund
- GoFundMe Small company Relief Initiative
- KKR Small Business Builders
There can also be still lots of government CARES Act money that has been set aside for small business COVID stimulus grants, which are available through local governments. To locate the local stimulus grant program, look at your county and city websites. Also read: CARES Act Small Business Grants: Look at your Local Governments For Funding.
Businesses In Specific Industries
Whatever your specific industry, you might be able to find a grant program focused on helping businesses in your sector excel. Usually, these highly-targeted grants can be found by industry organizations or private companies. A few examples include:
- Halstead Grants (for jewelry designers)
- eBay Up & Running Grants (for eBay sellers)
- NASE Growth Grants (for self-employed individuals, including grants for truckers)
- Grant For The Web (for monetized websites)
- Visa Anywhere Initiative (for this startups)
At the beginning of your business grant search, make sure you spend plenty of time researching to determine if you will find any grants available for your particular industry/business type.
Just Plain Amazing Small Businesses
There are general small company grants available to any type of business, but they are very competitive, so you will need a super impressive story to wow the judges. A remarkable track record is a particular challenge for any startup business, which is usually understood to be a company that’s existed for less than 6 months. However, if you’ve achieved a great deal in just a couple of months, or else you have an especially amazing idea, you might like to apply to one of these highly competitive small business grant contests.
A couple examples:
- FedEx Small company Grant Contest: Any kind of small business may make an application for the FedEx business grant. To provide you with a concept of what kind of competition you’d be facing, in 2022, there have been 8,300 applicants and 12 winners. The grand prize is $50,000, second-place gets $30,000, and ten third-place winners get $15,000.
- Hello Alice: Startup business platform Hello Alice is currently offering $10,000 small company grants and mentorship sessions. Hello Alice also provides another grant for businesses impacted by COVID.
You can also be able to find general startup business grants open to businesses in your town, city, county, or state.
How To Get A Startup Business Grant: Strategies for Applying
You’re probably curious about tips to get a small company grant. If obtaining a grant were easy, there’d be no such thing as loans. Obtaining a grant means competing to stand out of the crowd of other applicants. While every grant is slightly different in terms of qualifications and expectations, here are a few general tips for applying for grants.
Tip 1: Make certain You’re Eligible
Ensuring eligibility is one of those obvious-sounding tips, but trust me, you do not want to place all of the effort it requires to apply for a grant into one you don’t actually qualify for. Should you aren’t sure if you qualify, contact a associated with the business providing the grant and ask.
Tip 2: Tailor Your Pitch For your Audience
Research the culture from the entity offering the grant. Are they informal and hip? Formal and professional? Are you familiar with the lingo they will use? Can you place it to your application without sounding forced? You may have the very best business idea on the planet, but ultimately, you’ll need to convince the judges that you’re the applicant who deserves the money most.
Tip 3: Don’t Skip Any Part From the Application
No one enjoys applications (I’m sure someone does, however, you should avoid that person). Certain parts are most likely going to be annoying or even redundant. Don't skip them. The one thing to remember about judges is they’re looking for something, anything, that will help them limit the field of applicants. One of the simplest ways to do that would be to discard applications with big blank spaces.
Tip 4: Produce a Compelling Narrative
You might not have lived an existence full of adventure, but chances are you have a story to inform with regards to you and just how you came into existence a business owner and grant applicant. Providing these records as a contiguous story with a trajectory and destination can increase your application’s likelihood of being bold. Ask your pals what they like about you if you’re drawing blanks.
Tip 5: Be Realistic
Be honest regarding your business’s quantifiable details, what you need, just how long it will take you to achieve the goals you’ve outlined, and then any risks involved. This isn’t for humility’s sake; it’ll help you seem like guess what happens you’re talking about.
Tip 6: Talk About How Your Business Will Affect Your Community
Many grants for starting a company can be found with a few type of community advocacy in your mind. If appropriate, talk about the way your business fits into the broader tapestry of your community and how you provide the most bang for their buck.
Best Options to Startup Grants
Very few private companies are actually eligible for a company grant. Unless your business or startup is extremely innovative and provides a demonstrable benefit to your community or even the world in particular, you are probably not grant-recipient material. Even if you're eligible for some grant money making it through the lengthy proposal process, you might only land several hundred to a few thousand dollars.
Furthermore, startup business grants are really hard to come by, as grantees will generally need to see what kind of results you’ve achieved on other projects carried out by your organization. Don’t be seduced by government grant scams that will perhaps you have believe there are piles of free grant money out there to take — this is not the case at all.
Rather than looking to be among the fortunate few granted free money, you might want to consider grant alternatives for your business.
Alternatives for brand new business grants include crowdfunding, online loans, equipment financing, yet others. A few examples might include:
- Launch a Kickstarter campaign
- Get a 0% interest crowdfunded loan from Kiva U.S.
- Get a startup loan from Credibly
- Apply for a PayPal Working Capital loan
- Use Fundable for equity-based business crowdfunding
Startup Business Grants: FAQs
How can I get a grant to start my very own business?
It’s not the easiest way to obtain money to start your company, however, many grants are for sale to new business organisations. Just remember that many of them convey more specific qualifications than as being a new business. You’ll must find one which fits the kind of business you’re trying to start or that caters to business people as if you.
Does the government offer free money for startups?
Yes, but with a great deal of caveats. Federal, state, and native governments offer new business grants based on a number of different criteria. Getting one of those grants usually involves overcoming some stiff competition and meeting specific economic growth requirements.
Will the SBA offer startup business grants?
The SBA has some grants, like the Boots to Business program. You can find others through grants.gov. Observe that SBA programs that provide loan forgiveness under certain circumstances — for example Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP) — aren’t grants per se.
I'm not qualified for a grant. How else can one get money to begin a business?
You’re in good company. Most new businesses aren’t began with grants. The good thing is you have a lot of options, from crowdfunding, online loans, equipment financing to seed money, investment capital, and even common bootstrapping. Learn about other options in our help guide to startup financing.
