Overview
Most people are ambitious and passionate, and they have the drive that compels them to start their own business or venture. However, not everyone has the funding or resources to do so on their own, which is why they need rely on sources of capital, one of which is grants.
Grants allow you to grow your business without having to deal with the stringent terms and conditions that banks, and other lenders have. Grants also come with certain requirements, and their processing can take some time. This article covers everything you need to know about small business grants in the USA.
What is a Small Business Grant?
A small business grant is a type of fund given to a business by an organization for a certain purpose. These grants are particularly available for small businesses, especially those that are looking to build their business, expand their organization, or conduct research and development.
Small business grants are quite different from business loans, credit cards, or other types of lending products. They don’t have to be repaid, nor will they have any impact on your credit score. However, there are certain limitations that you need to know before applying for them.
The money given to you through a small business grant must be spent in the outlined manner, which is usually communicated by the organization that offers them. If you don’t adhere to the requirements, you might be penalized.
Find out more: Thinking of buying a business? Read our guide on how to buy a business for helpful tips.
What is the Difference Between a Grant and a Loan?
One of the main differences between a grant and a loan is the repayment guidelines. With loans, you have to pay back the borrowed amount, plus the interest charged on it. That isn’t the case with grants. When receive a grant, you don’t have to pay back the amount that you receive.
Grants are mostly given by the state or federal government, but you might also find organizations and foundations that give out grants. Although these are quite rare, they mostly give out funds to NGOs and charities. On the other hand, loans are given out by companies, individuals, banks, or other financial institutions and sources.
Another difference between the two sources of funding is their application process. For the grant process, you need to go through a longer application process, and it can take a lot of time to be reviewed. Plus, you need to match the eligibility criteria before you apply.
With loans, you go through a much shorter process, as well as lenient eligibility criteria that make it easier for you to secure a loan. However, there is a greater risk involved with securing loans, which is why you need to provide the lender with collateral, usually in the form of property.
Find out more: Looking for funding? Read our loans to buy a business guide for helpful tips and funding options.
Considering the Pros and Cons of Grants
There are several benefits of accessing small business grants, but they also come with downsides. Let’s have a look at a couple of the pros and cons.
Advantages
No repayment or collateral
One of the biggest benefits of small business grants is that the money you get doesn’t have to be repaid to the government or whichever organization is sponsoring them. This way, businesses can make use of these funds to grow or set up their business without having to worry about high interests and repayments.
Abundance of information
Another advantage of small business grants is that you have a lot of accessible information regarding how, where, and when you can get them. It makes your search for a suitable grant much easier, and you would be able to learn about all the requirements that you need to fulfill to obtain it.
Higher credibility
Once you have received a business grant, you will be more likely to get more of them, as it would add to your credibility and help you gain more visibility. Plus, grants will also promote your business and make it look more promising, which might even attract investors in the long run.
Disadvantages
Time-consuming
Although small business grants are essentially free and they help you progress your business, they can be quite time-consuming. They involve a lot of research and paperwork, as well as finding the grant that is suitable for your business.
High stakes
There are far more grant proposals than there are grants, and only a few of them are accepted. Since grants essentially get you free money, thousands of businesses line up to apply for them every year.
Conditions and limitations
Lastly, another disadvantage of small business grants is that they come with several conditions and requirements that you must fulfill, including having to justify how you will spend the money. Once you get the grant, you will also have to stick to your promises.
Main Portal Links for Grants in Top States
When it comes to small business grants in your state, there are several sources that you can use to research them. We have included important links from six states with the best economic ranking.
Utah
Below are important links you can visit to find resources, grants, and credible websites in Utah.
Utah Small Business Grants | Grant Watch
Colorado
Explore these links to find resources, grants, and credible websites in Colorado.
Programs and Funding | Colorado OEDIT
SBDC Grand and Funding Database
Small Business Grant Programs | Colorado Enterprise Fund
Colorado Small Business Grants
Colorado Small Business Grants | Grant Watch
Idaho
Here are a few links you can access to research grants, resources, and credible websites in Idaho.
Small Business Grants for Women in Idaho
Idaho Small Business Grants | Grant Watch
Gusto - Cash Grants For Small Businesses
Washington
You can find helpful resources, grants and other information from these credible websites associated with Washington.
Small Business Grants | Washington State Department of Commerce
Washington Small Business Grants | Grant Watch
Massachusetts
If you live in Massachusetts, you can explore these links to research grants, resources and other useful information.
Massachusetts Small Business Grants | Grant Watch
LISC Small Business Recovery Grant Program for Massachusetts
Massachusetts Small Business Grants
Nevada
You can explore these links if you live in Nevada. They are concerned with grants, helpful resources and other important information.
State of Nevada Department of Business & Industry
Small Business Grants for Women in Nevada
Small Business Grants You Can Explore
Small Business Administration (SBA) grants
Small Businesses Innovation Research
This small business grant offers to fund startups and small businesses that venture into the tech industry and work on technological innovation. They should meet the federal R&D requirements and should also be able to convert research into action.
The deadline for applications is usually in March, and applicants can expect to receive anywhere between $50,000 to $250,000 for 6 months.
Small Business Technology Transfer
Similar to the previous grant, The STTR grant offers funding to small businesses who are working in the federal innovation R&D sphere, especially those that can work to address the scientific and technological challenges being faced by the nation.
There are three phases of funding in the SBTT program. In the first phase, applicants are awarded up to $100,000 for one year’s worth of study and research to test the technical, scientific, or commercial feasibility of their idea. In Phase Two, the previously successful applicants can expect to receive up to $500,000 for two years to develop their ideas.
$10,000 small business grants
This award is initiated by Nav, which works to empower small businesses. The small business grant is designed to award $10,000 to qualified businesses. Up to 200 businesses are invited to apply for the grant, and 5 of them are selected based on the most votes.
If you are part of the shortlist, you get a chance to share your business with the Nav team, and you can expect to win grants of $5,000 and $10,000.
This award is a Hello Alice initiative in conjunction with eBay to support the growth and success of small businesses that are on its platform. Apart from the grant, the businesses will also receive online learning content through Seller School, as well as training from eBay Growth Advisors.
Up & Running Grants will award 50 businesses a grant of $10,000 each.
Other notable funding options include:
Start-up business grants
This is an open innovation program where startups get to showcase their innovative solutions from all over the world and get a chance to receive funding to kickstart their business. Nearly 10,000 startups worldwide have participated in this initiative so far and have raised more than $16 billion.
There are a total of five awards in this initiative: Overall Winner, Audience Favorite, Visa Direct, 2nd Place, and 3rd Place. The first one has a cash award of $100,000, with the lowest being $10,000. You can apply here.
The NASE Growth Grants are awarded to small businesses and startups since 2006. The grants are purposed towards marketing and advertising, as well as recruitment, expansion, and other business needs.
This grant offers up to $4,000 for small businesses. Applicants can submit their documents throughout the year, and applications are reviewed quarterly.
Other notable funding options include:
Nike Community Impact Fund (applications have closed for this grant, but it is worth mentioning for 2023)
Walmart Local Community Grants
Grants for women-owned businesses
The Amber Grant was founded by WomensNet in 1998, and it awards grants to women-led businesses regularly. It was started to honor the memory of Amber Wigdahl, who died at the age of 19 without fulfilling her ambitious dreams.
Applicants can share their business ideas and story with the WomensNet team and get the chance to receive a $10,000 grant every month, as well as an end-of-year grant that amounts to $25,000. You can apply here .
Cartier Women’s Initiative Award
This grant is awarded to 21 female entrepreneurs from all over the world, which are shortlisted from a huge number of applicants. The awardees are also given one-on-one mentoring, so they can learn more about how to scale up their business.
The top seven finalists receive a $100,000 grant each, while the others will win $30,000 each. The finalists will also get to participate in the INSEAD Social Entrepreneurship Six-Day Executive Program and enjoy other perks. Applications (to be funded in 2023) will close on 15 July 2022. You can find out more information on how to apply here.
Some other funding options include:
Grants.gov (type ‘women’ in the keyword search)
Government loans for small businesses
Economic Injury Disaster Loans
These loans provide Federal assistance to small businesses that have faced losses or injury due to natural disasters or unforeseen circumstances. It is aimed towards helping such businesses rebuild and repair their place of business or equipment.
The EIDL offers up to $2 million loans to small businesses or non-profit organizations that have sustained economic or physical damages. You can find the application form at the bottom of the website.
This loan is one of the most common types of funding for small businesses, and it is also part of the Small Business Act. It is designed to facilitate for-profit businesses that can’t get any financing from other sources.
These loans don’t work quite like a grant, and they have the repayment requirements, as well as some eligibility criteria for businesses, which can get up to $2 million in financing. There is some documentation you’ll need to gather before applying, and you can find a checklist on the website.
Other funding options include:
Business Physical Disaster Loans
Disadvantaged businesses grants
8(a) Business Development Program
This development program is specially focused on helping minority-owned and led small businesses to grow by providing them access to better resources and contacts so that they can become more competitive and have a greater market share.
Through the program, small businesses can receive government contracts ranging between $7.5 million to $100 million, depending on the industry and other factors you need to research. There is quite an extensive process to apply for this program, so start by checking your eligibility.
This program also helps small businesses, especially those led by minorities, to gain exposure and receive government contracts by partnering them with experienced companies, also called mentors. It helps businesses understand different business management systems and improve their operations.
Other funding options include:
USDA Rural Business Development Grants
Operation HOPE Small Business Development Program
Veteran small business grants
The Veteran Small Business Award
This award grants money to military-owned businesses, which are gauged by their contribution to the military community, the business owner’s history, and how the funds will be used for the growth and development of the business.
You can apply for the grant through the StreetShares online platform and expect to receive up to $15,000 in funding.
Grants for minority women-owned small businesses
This startup grant is particularly focused on Black female and non-binary founders of startups that show true promise. Apart from the funding, the founders will also receive guidance regarding the fundraising paradigm and how they can leverage it to gain more funding in the future.
The Black Founder Startup Grant awards grants of $5,000 and $10,000 and interested people can apply through the grant website.
Other grants for minority women-owned small businesses include:
Federal small business grants
Economic Adjustment Assistance
This grant is offered by the EDA, and it helps small businesses build back in a better manner after the coronavirus pandemic, which has caused significant losses and damage all over the world. Moreover, it also enables them to build a stronger economy that doesn’t disintegrate due to future unforeseen circumstances.
Applicants who are qualified and selected can receive anywhere between $100,000 and $10 million, and they can apply until 31st March 2022.
Other types of federal small business grants include:
Statewide Planning, Research, and Networks
American Rescue Plan Act Indigenous Communities
EIDL targeted grants
This grant provides funding to small businesses that are owned by people belonging to the low-income community. Moreover, companies that can exhibit a reduction of 30% or more, and have 300 or fewer employees are considered for the grant.
Applicants who are successful in this grant program can receive up to $10,000 in funds, provided that they are eligible for the EIDL program.
SBA disaster loans
Home and Personal Property Loans
This loan is offered to small businesses belonging in a declared disaster area that have experienced physical damage to their property. Even individuals who don’t own a business can benefit from the loan.
Home or business owners can avail up to $200,000 to replace or repair their property, or up to $40,000 to replace their personal property.
This type of loan is offered to business owners to protect their home or business, and also lower the risk of property damage. The types of damage include flood mitigation, wildfire mitigation, wind mitigation, earthquake mitigation, etc.
Applicants can rebuild or strengthen their business by increasing their existing disaster assistance loan up to 20% of the physical damage they have experienced.
Writing Your Grant Proposal
If you have found a small business grant that you are interested in, you will need to write a grant proposal to present to the provider of the grant. Here are the key steps that you need to know to write a winning grant proposal:
Write a strong cover letter
The cover letter should engage the grant provider and should grasp their attention at a first glance. The cover letter can be less formal compared to the rest of the proposal, and it should also be short but impactful.
Prepare an executive summary
The executive summary includes an introduction to your business, its market share, project goals, and other key details. You should keep it concise, and mention the funds you need, as well as how you will use them.
Introduce the business
Introduce your business, sharing its history, purpose, experience, projects, and any accomplishments you might have. An ideal tip would be to add testimonials and feedback from your satisfied clients, as this would have a positive impact on the grant provider.
Elaborate on your problem
The problem statement is where you mention the problem in your community and how your business can provide a viable solution. It should also explain how none of the previous solutions have solved the problem.
Communicate your goals and objectives
Make sure to communicate your goals and objectives clearly and clearly state your desired outcome and how the grant will help you achieve it. Make sure that your objectives and goals are measurable, practical, and doable.
Include methods and strategies
You can also outline the resources and skills you need to solve the problems, including any additional equipment, facilities, transport, or other services that you need. Most importantly, you should make sure that your methods are cost-effective and justify the requirement for funding.
Develop the process evaluation method
The grant proposal should also have the process evaluation method, which outlines the evaluation timeline, as well as who will conduct the evaluation. This is a way for the grantee to understand how their funding will make a difference in the long run. Make sure to gather feedback from the community that is affected or participating in the project.
Elaborate on sustainability
Ideally, you should focus on sustainability and share your foresight to see the project through for the next few years. This section should outline costs that go beyond the project, total cost of ownership, operational costs, maintenance, and other factors. Make sure to include inflation, ongoing training, valuable skills, and the potential for future growth.
Develop a project budget
The project budget describes how you utilize the funds and resources as the business owner. You will have to justify each expense, and it also helps grant providers to understand that you aren’t trying to get more money than you need, which is why you should double-check everything before sending it.
Find out more: Want to know how much your business is worth? Get a free estimate valuation.
How BusinessesForSale.com Can Help You
Now that we’ve given you useful information on grants in the USA, you’ll have a better understanding of how small businesses can gather funding to start or grow their businesses – helping you make a more informed decision. Remember, grants take time to apply for, so if you’re looking for a quick injection of cash, it may not be the most effective option.
Nonetheless, grants are lifelines for small businesses. If you’re confident that you’ve found the right grant and you’re at the business proposal stage, including an accurate valuation of your business would be a handy insight. You can do this using our free valuation tool .
Although you may not be thinking about buying or selling a business right now, it may be helpful to refresh your memory on the process in case that time comes. You can do this by reading our buying guide or selling guide .
If you have any feedback or queries, don’t hesitate to contact us.
