One of the main challenges of launching a new business is accessing financing to get started. Small business grants offer funds that support growth initiatives like hiring employees, improving marketing and advertising, expanding office space, purchasing inventory or equipment, and professional education and training.
In this article, we’ve rounded up some of the best grant opportunities specifically for new businesses and outlined their eligibility requirements so you can start the process of discovering the grant that’s right for you.
What is a small business grant?
Small business grants are funds provided by a government organization or corporation to a business to be used for a specific purpose. Businesses can apply to receive grant funding at any stage, but new owners can take advantage of this interest-free, zero-risk financing option to start growing their business.
A grant is not a loan; it doesn’t have to be repaid. Receiving a grant doesn’t affect your credit score. Once you have the money, it’s yours to invest in your business. However, most grants come with restrictions around how you can use the funds provided. As part of your application, you’ll have to detail how the grant will be used to ensure that your intentions align with the purpose of the grant.
Many grants are aimed at specific types of businesses and business owners. It’s often easier to compete for a grant that supports businesses in your specific niche. There are grants for minority-, veteran-, and women-owned businesses, grants for environmentally sustainable businesses, and grants for contributing to your local economic development as well as grants for your specific industry (e.g., e-commerce, technology, or agriculture).
Most grants require a thorough application and approval process. Some grants are designed as challenges where businesses submit pitches or business plans to compete for top prizes. In the following sections, you’ll find grants from both government and corporate organizations that can help you grow your small business.
Government Small Business Grants
Federal Grants
The federal government doesn’t provide grants for covering the initial costs of starting a business, including operating costs. Federal grants focus on supporting research and development in the areas of science, technology, and conservation as well as nonprofit organizations.
Some federal grants are administered through the Small Business Administration (SBA). The SBA offers plenty of funding options for small businesses, including grants. However, SBA grants cannot be used for starting or expanding a business.
If you are ready to invest in research and development, the federal government offers the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
Grants.gov is the portal for finding and applying to federal government grants. Challenge.gov lists prizes and competitions that encourage businesses to drive innovation and solve problems with government funding.
State & Local Grants
Your own state or municipality might have small business grants that encourage entrepreneurs to support and strengthen the local economy.
The Economic Development Administration (EDA) has agencies in each state. They provide grant opportunities to help businesses establish themselves and fund professional training and education.
You can find more state and local small business grant opportunities through membership with The State Business Incentives Database. Your regional Small Business Development Center (SBDC) — affiliated with the SBA — can also help connect you with local grants and opportunities for networking and professional development.
Corporate & Foundation Small Business Grants
FedEx Small Business Grant Contest
FedEx’s annual contest is for businesses that have been in operation for at least six months and have fewer than 99 employees. The grand prize is $50,000, plus $7,500 in FedEx Office print services. There are also cash prizes for second and third place winners.
Alibaba.com Grant Program
Supporting online businesses who leverage their platform, e-commerce giant Alibaba offers grants for 50 recipients who will receive $10,000 for innovative products and exceptional go-to-market ideas.
Visa Everywhere Initiative
Visa sponsors grants for businesses that are solving payment and commerce challenges. Participating in the program also provides networking opportunities and the four finalists are asked to present at the Visa Payments Forum each year.
National Association of the Self-Employed (NASE) Business Development Grant
If you’re a member of the NASE, you’re eligible to apply for their $4,000 business development grant. This funding can be used for marketing and advertising, hiring employees, and expanding your facilities.
For Nonprofit Organizations
Patagonia Corporate Grant Program
Aimed at supporting organizations that work to preserve and protect the environment, Patagonia’s grant program provides between $5,000 and $20,000 to eligible businesses.
Walmart Local Community Grants
Walmart’s grant program awards up to $5,000 to nonprofit organizations that operate and directly impact their local community.
Grants Supporting Diversity in Small Business
Amber Grant Foundation
Each month, the Amber Grant reviews the applications of women small business owners, selects five finalists, and chooses one business to receive its $10,000 grant, awarding the four runners-up $1,000 each. At the end of the year, the recipients of the $10,000 grant are eligible to be selected for a $25,000 grant. The Amber Grant also offers business-specific grants and grants for non-profits up to $5,000, as well as micro-grants of $2,000.
StreetShares Foundation Grants for Veterans
The StreetShares Foundation is a nonprofit organization that helps veterans along their entrepreneurial journey with grant funding up to $15,000 and business development and coaching opportunities. Alongside their Veteran Small Business Award, the organization offers specific grants for veteran women entrepreneurs. Their Military Entrepreneur Challenge awards over $80,000 to finalists.
National Black MBA Association (NBMBAA) Scale-Up Pitch Challenge
The NBMBAA provides business development resources for Black-owned businesses. Its Scale-Up Pitch Challenge seeks out highly scalable business ideas with proven product-market fit. The award provides the winning business with $50,000 while second place receives $10,000, third place receives $7,500, and the People’s Choice Award winner receives $1,000. On top of the potential for funding, participating in the challenge introduces businesses to a community of potential investors and partners.
First Nations Development Institute Grants
The First Nations Development Institute is a nonprofit organization that provides financial and technical resources to tribes and Native-run nonprofit organizations. Native Americans including Native Alaskans, Hawaiians, and Samoans are eligible to receive a variety of grants through programs such as the Native Youth Business Plan Competition.
Finding Funding When You Can’t Qualify for a Grant
There are many other options for financing if you don’t qualify for any small business grants. Capital fundraising, crowdfunding, loans, and lines of credit are other ways you can finance your business. For example, the SBA backs different types of loans provided through its lending partners, taking on some of the risks associated with lending to new business owners. The SBA 7(a) loan can be used to increase your working capital (among other uses) while the 504 loan can be used for larger purchases of fixed assets like equipment or real estate.
If you can’t find a grant that will cover the costs of starting up and traditional lending institutions like banks are reluctant to take a risk on your new business, online lenders like Fundbox provide term loans and lines of credit that enable owners to access the capital they need to invest in growing their business. Unlike bank loans, Fundbox’s financing options are built for small businesses like yours, with higher approval rates and flexible repayment plans. The application process is much faster, and, on approval, funds are typically transferred into your account within one business day.
Get the funds to kick off your operations and start growing your business. Apply today to see if you qualify for a term loan or line of credit from Fundbox.
Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.