As a small business owner, you likely are always looking for money to grow your business, and when something like a global pandemic hits, that need only increases.
Whether you’re looking for grants to help you weather the rest of the COVID-19 pandemic or are just looking for a small business grant to take your company to the next level, you’ll find many options here.
Best Small Business Grants of 2021
- EIDL and PPP
- LISC’s Small Business Relief Grant
- The Barstool Fund
- Made for More Small Business Contest
- GoFundMe Small Business Relief Fund
What is a Business Grant?
A grant is money that is given to a person, business, nonprofit, or corporation from federal, state, county, or local governments, or private businesses or corporations. There are a number of companies, nonprofits, and government agencies providing essentially free money to small business owners in the form of a small business grant. And the best part? Grants do not require repayment of any kind.
Grants can be formed to target businesses based on a variety of factors, including minority-owned businesses, specific for-profit businesses as well as non-profit organizations, veteran-owned businesses, grants for women, and more.
You don’t have to make your pitch on “Shark Tank,” refinance your home, or take out a small business loan to take the next step in your entrepreneurial journey — business grants may help you get there, if you know where to look and how to apply.
And right now, with so many small businesses struggling through the pandemic, these grants can provide much-needed financial support that could be the difference between thriving or closing your doors.
We’ve pulled together numerous resources for business owners searching for small business grant opportunities. The majority of these have broad grant application requirements, meaning many businesses qualify.
Keep in mind that this can be a double-edged sword for applicants, though — you can apply for a lot more business grants if the qualifications are broad, but that means more competition for the grant. Often, you can find more success by finding niche grants for your industry, or based on your ownership structure and makeup.
In that spirit, we’ve provided some how-to advice all business owners can use to get your grant entries and/or grant proposals together, along with lists of business grants, split into some of the most searched-for categories.
How do I qualify for a small business grant?
Depending on the grant and which organization is offering it, there may be different qualifications. Make sure you investigate the grant fully to make sure you meet the requirements when you apply. In many instances, grants are designed to meet specific business use case parameters, so make sure the reason you are looking for the grant is the reason they are offering the grant.
In addition to the application, there is often an interview component where the organization offering the grant will want to get to know you and your business, talk about how you plan to use the grant, what type of value the grant will provide to your business, and otherwise determine if they want to offer you the grant.
Types of small business grants
COVID-19 Relief Grants for Small Businesses
There are grants available to alleviate some of the pain that the coronavirus has caused small businesses.
EIDL and PPP
The Federal government recognizes the negative impact that the coronavirus pandemic has had on tens of thousands of small businesses across the country. Currently, there are two main programs that may provide financial help…and that may not need to be paid back.
The Economic Injury Disaster Loan, while yes, is technically a loan, includes a $10,000 grant for eligible businesses. You may qualify for a loan of more than that amount, but if you meet the following eligibility criteria, you may qualify for a $10,000 grant;
- Be located in a low-income community
- Have suffered an economic loss greater than 30%
- Employ 300 or fewer employees
The Paycheck Protection Program (PPP) is also back with a second draw PPP loan for small businesses impacted by COVID-19, or a first time PPP loan for those who missed out in 2020. Although it’s not technically a grant, if you spend the funds on approved expenses during a specific time frame, the entire PPP loan may be forgiven. That essentially turns it into a grant.
Shuttered Venue Operators Grants
The Shuttered Venue Operator (SVO) Grant program provides $15 billion in grants to certain businesses impacted by COVID-19, including:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Relevant museum operators, zoos and aquariums who meet specific criteria
- Motion picture theater operators, or
- Talent representatives
The applicant must have been in business by February 29, 2020. This program will be administered by the SBA.
LISC’s Small Business Relief Grant
LISC bridges the gap between government agencies and corporations with capital and the businesses and projects that need it. They facilitate many grants and other local funding opportunities, including the Small Business Relief Grant targeting businesses in rural areas.
Grants of $5,000-20,000 will be awarded to small businesses located in rural communities (those with a population of 50,000 or less) who have been impacted by COVID-19, with emphasis on underserved communities. Grant funds may be used for:
- Operational costs (including rent and utilities)
- Vendor debt
The Barstool Fund
Another noteworthy COVID-19 relief grant comes from The Barstool Fund (sponsored by Barstool Sports). The fund has an ongoing crowdfunding campaign to raise funds for eligible businesses that apply. There is no set grant amount, but a recent business received $9,000.
GoFundMe Small Business Relief Fund
Crowdfunding company GoFundMe has partnered with partners to provide a COVID-19 relief fund for small businesses. Your business may receive a matching grant when you raise $500 through your own GoFundMe campaign, as long as you can verify that your business has been negatively impacted by the coronavirus. Funds must be used to pay business expenses or care for employees.
Made for More Small Business Contest
Ball, maker of canning products, is offering small businesses who have made significant contributions to their communities during the COVID-19 pandemic awards of up to $10,000. To enter, you must use Ball brand canning products in your business.
6 Private Small Business Grants
The following may not be specific to COVID-19, but any money (especially that doesn’t have to be repaid) will be welcome during these difficult times.
FedEx Small Business Grant Contest: Good for: Existing Businesses
Each year since 2013, FedEx has offered $25,000 grants to businesses. The application is only open for a one-month period, so ready your applications for the next open date. You’ll need to capture your business’s story via video.
National Association for the Self-Employed (NASE) Growth Grants: Good for: Growing Businesses
NASE Growth Grants are offered to NASE members looking to take their business to the next level. NASE grants are worth up to $4,000 and can be used for all types of activities, like purchasing new equipment, hiring help, and creating promotional material.
The StreetShares Foundation Veteran Business Grant: Good for: Veterans
The StreetShares Grant is open to veterans, active-duty members, or the spouse of a military veteran or active duty member. Applicants can receive up to $5,000 and will be judged based on their business idea, their expected use of funds, product-market fit, team, and the influence the business will have on the veteran or military community.
Nav’s “Legitify Your Small Business” Grant: Good for: Existing Businesses
Each quarter, Nav offers a $10,000 small business grant to help them solve a business problem or take their business to the next level.
Caleb Brown Urban Entrepreneur’s Community Grant: Good for: Community Businesses
The Caleb Brown Venture Capital and Consulting Project hosts a $1,000 grant aimed at promoting and nurturing young urban entrepreneurs with vision who plan to rebuild local blocks, neighborhoods, and communities “by providing training and jobs to the next generation.” The grant is open to startups and young businesses in urban areas. This contest is run every month—submit your application by the 15th to enter.
Halstead Jewelry Grant Award: Good For: Jewelry Startups
Are you a jewelry artist? If so, submit your portfolio and business plan to Halstead for its annual jewelry grant award of $7,500. In addition to funds, Halstead aims to help jewelry artists develop their business, fine-tune their plan, and hit their goals.
9 Federal Small Business Grants
The Federal government, too, offers grants to support small businesses.
Small Business Innovation Research Program: Good For: Technology Companies
The SBIR grant program is for entrepreneurs focused on innovations in technology that have the potential for commercialization. You can check its funding opportunities here. Focus areas from the past include clean and safe water, homeland security, land revitalization, green construction, advancement of health care, and more.
Small Business Technology Transfer Program: Good For: Energy-Focused Businesses
The STTR program aims to expand funding for innovative research and development leveraging existing technology. What makes this program unique from the SBIR program is that small businesses get the opportunity to formally collaborate with research institutions throughout the program. Each agency sets its own guidelines — check here for open STTR grants.
Department of Defense Grants: Good For: R&D Companies
The DoD offers grants to small businesses through the STTR program and a number of other initiatives, like the Defense Enterprise Science Initiative. The Office of Naval Research, the Air Force Office, and the U.S. Army Research Institute are all looking for research and development of technology that will help them reach their goals.
Department of Energy Grants: Good For: Innovative Technology Companies
The DOE offers grants through the SBIR and STTR programs for innovative research and development leveraging technology developed by a university or a DOE National Lab. Check here for its current grant openings.
National Institute of Health (NIH) Grants: Good For: Biomedical Businesses
NIH is a federal agency within the Department of Health and Human Services (HHS). It offers business grants to small businesses developing and researching biomedical technology. It is currently funding opportunities related to COVID-19 research.
Department of Justice Grants: Good For: Public Safety Projects
The DOJ allocates grant funding to projects that support law enforcement, public safety activities, programs to improve the criminal justice system, and more. Here’s an overview of the agencies within the DOJ that provide grants.
Department of the Interior Grants: Good For: A Variety of Businesses
The DOI offers small business grants through several departments, including the U.S. Fish and Wildlife Services, Indian Affairs, National Park Service, and Native American Graves Protection and Repatriation Act. Find other DOI grant opportunities on Grants.gov.
USDA Rural Development Business Grants: Good For: Small Rural Businesses
The Department of Agriculture offers both loans and grants to support businesses in rural areas to create quality jobs. It funds community projects such as the development of housing, community facilities, and other services.
National Institute of Food and Agriculture (NIFA) Grants: Good For: Agriculture & Food Nonprofits
The NIFA is a federal agency within the USDA with a focus on leadership and funding programs. It offers grants throughout the year, which come with support and guidance. Be mindful that many of its grants are offered to nonprofits or larger businesses.
Small Business Grants Specifically for Women
While grants offered by private companies and grants for startups are available to a broader range of business owners, there are also grants specifically for women-owned businesses. You can find resources and information at women’s business centers, but here are two business grants for women to start with.
Eileen Fisher Grant Program: Good For: Businesses with Social or Environmental Impact
Eileen Fisher is a clothing shop for women whose founder has a personal passion for helping women entrepreneurs. All grants exceed $10,000 and are awarded to up to 10 applicants each year. Businesses must be in operation for a minimum of three years and meet other various requirements.
The Amber Grant Program: Good For: Planning Stage Businesses
The Amber Grant is a $10,000 cash grant awarded to qualifying female entrepreneurs each month. At the end of the year, monthly grant recipients will have the opportunity to win an additional $25,000 grant.
How to Find a Grant for a Small Business
A quick Google search will pull up millions of results for business grants. So many possibilities are out there that it can seem impossible to narrow down the prospects. But there are a few resources that can not only help you find the right grants for your business, but even assist in the application process, and help you identify grant opportunities that can’t be missed.
Free money from the government — who wouldn’t want a piece of that? Grants.gov is the federal government agency’s landing page for all federal government grants across agencies. It’s a great resource for finding grant opportunities, but small businesses may be disappointed to find that many of the grants are closed to them.
The site includes grants for school systems, local governments, individuals, and nonprofits as well, so you have to sift through to find ones that are the right fit for you. Also, the federal grants available to small businesses have specific requirements when it comes to business size. (You can read more about how the federal government determines which businesses qualify as “small” businesses in this article.)
If it seems like receiving a business grant, specifically a government-funded one, is tricky, that’s because it can be. Here are some general guidelines and requirements that the federal government uses to determine business grant eligibility requirements:
- Grants are not provided for starting a business.
- Grant money is not made available for a business to pay off debt or to cover operating expenses.
- State and local grants that are provided by the federal government may be awarded to organizations that assist with economic development.
GrantWatch is another database of grants of every kind, though it’s a subscription-based service you will need to pay for. The site has a wide variety of grants offered by federal, state, and local governments, as well as foundations and corporations. The site is constantly being updated, and grants that have closed are archived.
You can filter the more than 25,000 grants by category to narrow down the ones targeting small businesses like yours.
Small Business Development Centers
Once you’ve exhausted your searches for grants from federal agencies, the next stop on your list should be local and state business grants. You may be able to hit paydirt and find some of these on your own, but there’s a free, local resource that may help.
Small Business Development Centers are a business owner’s best friend. Local, regional, state, and national offices mentor small business owners and help them understand business financing options, craft marketing strategies, and connect to other local business owners (and much more — these guys do it all).
One thing they can help with is navigating the grant process. Very few people have as much visibility as SBDC advisors do on the local business grant scene. It’s the one appointment you can’t afford not to make when searching for small business grants.
SCORE is a nonprofit organization backed by the Small Business Administration that promotes free tools and mentorship for American small business owners. Like SBDCs, SCORE is a free resource for entrepreneurs looking for help or expertise and they have many local experts that you can connect with. A SCORE mentor may help you identify local grant opportunities, or review your pitch to help you make it as compelling as possible.
Your Local Librarian
Among the many, many things local libraries provide for free or at a low cost to business owners is help finding grants. Just ask your librarian. These men and women are trained researchers with access to hundreds of databases.
Libraries often work in conjunction with local Chambers of Commerce or business organizations already and may be able to connect you with experts who know the local lay of the land and help you find business grants specific to your community.
How to Apply for a Small Business Grant
Work smart AND hard. Instead of filling out an individual grant application, do what every job applicant does and create a “resume” for your business that outlines your answers to the common questions business grant-givers ask of their applicants. While grants are technically free money, that doesn’t mean they come without hard work on your part.
Some applications will vary based on what’s required. For example, a local government grant will likely require an explanation of how your business’s growth and development will benefit local commerce directly, while a grant from a private company like FedEx may require a persuasive video.
Here are a few common assets you may need to provide when applying for a business grant:
- Time in business
- Number of employees
- Monthly or annual revenue
- How the funds will be used
- Your business’s “elevator pitch”
- Your Employer Identification Number (EIN)
- Your social media handles (LinkedIn, Facebook, Twitter, Instagram, etc.)
- A photo of you (and, if applicable, your partners or offices). Tip: A professional photo can go a long way, especially for companies looking to use your image on their site when announcing awards.
- A business plan. You should already have one, but if you don’t, talking to an SBDC adviser or your accountant can help you figure out the numbers, projections, and stats that reflect the current health of your business and where you can go down the road.
Business Grant vs. Business Loan: What’s the Difference?
While both help you get money for your business, grants and business loans for small businesses are different beasts. The main difference between a grant and a loan is whether or not they require repayment. Loans require you to repay the money you borrow; a grant does not. Grants can be awarded by government departments, trusts, or corporations and given to individuals, businesses, educational institutions, or non-profits.
Grants can be notoriously difficult to get, so if you apply for funding and are rejected, consider other financing, includeing business credit cards.
Here are other things to know about the differences between grants and loans.
- Grants Are Taxable Income. The IRS generally considers business grants as income for tax purposes. How your business is structured and how you report income to the IRS will determine what impact this will have on you come tax time, but generally, expect that a chunk of any grant money will go to Uncle Sam. You can head off this potential business grant downside by planning ahead and asking your accountant or tax professional to factor any grant money you’re awarded into your quarterly estimated payments (if applicable) or to help you estimate owed taxes and set aside those funds so you don’t have a larger-than-expected bill come tax time. Loans, however, are not considered income in the eyes of the IRS.
- You Pay Interest on Loans. Grants are free money for all intents and purposes. Even a low-interest loan, however, comes at a cost. Depending on the type of business financing, you could face APRs anywhere from 5% to 150%, depending on your personal and business credit scores, cash flow, years in business, collateral, and other factors.
- Grants Won’t Help You Build Business Credit. It’s one of the things that frustrates borrowers of all sorts — it takes credit to build credit. Building a business credit history with the major commercial credit reporting bureaus (most notably, Experian and Dun & Bradstreet), requires a tradeline of some sort. While a business grant is nothing to sneeze at — it’s free money, after all — once it runs out, you still may need additional funding to grow and expand your business. And a business grant isn’t reported to any personal or business credit reporting agencies.
- Grants Are a Direct Competition. Loans Aren’t. There’s no guarantee you’ll win a business grant or get approved for a business loan. But loans aren’t an either/or scenario where you’re competing directly with another business for the same pot of money. If you can prove to a business lender that you’re credit-worthy and your business financials are sound, you’re likely to get approved for a business loan, whether or not another business in the community applies. Business grants, however, tend to have one or a handful of winners — supplies are limited. You have to not only be a great business, you need to be the best business per the grant parameters. That’s not an easy feat for many grants where application requirements are broad.
- Loans Can Come With Consequences. If you can’t make a payment or you default on your loan, you’re going to face consequences. What those consequences are depends on the loan type and what you put on the line to get approved, but can include repossessed equipment, a business lien or UCC filing, a damaged personal or business credit score, or bankruptcy. Generally with a business grant, if you use the money unwisely and spend it on something your business wants but maybe doesn’t need, your biggest risk is opportunity cost. (However, keep in mind that larger grants— and especially federal grants— may have specific reporting requirements, and they may release funds only after certain milestones are met.)
Are There Any Downsides to Business Grants?
A variety of factors make many business owners skeptical of the “free” money that business grants offer. While every grant has a different application period, rules, terms, and conditions, here are some potential downsides you should keep in mind when applying.
As mentioned above, business grant funds are taxable income for IRS purposes. The funds will still be free money for your business, but you will need to make sure you don’t spend the entire payout without planning for the added income in your tax bill.
Business grant applications take time. You’re already a time-crunched business owner wearing a million hats, do you really have time to apply for every business grant opportunity you come across? It’s a valid complaint about business grants. The likelihood of winning the grant can be small depending on the size of the contest, so you have to make your own cost/benefit analysis to figure out if your most precious asset — time — is worth it.
Small business grants may require campaigning. Many business grants require a social media component, where you campaign or share something publicly about your grant application. That’s not necessarily a negative if you have an active and vocal social media following, but campaigning does take additional time and some business owners may understandably not want to be as public about their search for money.
Any way you look at it, small business grants are a good thing. It’s worth your time and energy to explore which ones your business is eligible to apply for because money you don’t have to pay back is money that helps your business grow.