Top Free Government Grant Programs for Small Businesses & Startups

government grant programs

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Did you know that apart from pre-seed and series funding, you can also get funding from the top free government grant programs for small businesses and startups?

We all know how hard it is to pool enough money to start a business venture. Sure, we can take our chances with venture capital funding. But not all businesses have the resources and connections to participate in such financing events. 

This is where the top free government grant programs for small businesses and startups come in. Let’s get to know these grants, shall we?

 

Business Grant Explained

Grants, in general, are essentially free money up for grabs. But money is still a scarce resource, so even though it’s free, there’s still some sort of criteria you’ll have to meet before you can get a business grant. 

The federal or state government, as well as corporations, non-profit organizations, and private individuals, can give out grants to small businesses and startups. Think of it this way, a business grant is similar to a pre-seed or series funding, without the grantor requesting for equity or return of investment. 

 

Is My Business Eligible for Grant?

Since grant agreements don’t have clauses about repayment in exchange for the money, the least that grantors can do is to screen the applications.

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First, you need to determine if your small business or startup is eligible for the grant. For example, the government wants to give out grants to those with a net annual income of less than $10K. This means that any business whose income is more than $10k can no longer apply for the said grant. 

Aside from profit performance, grantors may also consider the following factors in evaluating one’s eligibility:

  • Race and gender – black, indigenous, people of color, women in business
  • Economic status – low-income households, hardest hit businesses
  • Impact on society – environmental, livelihood
  • Growth potential – community-level, commercial-scaling

 

How to Find Small Business Grants

There’s no better way to find small business grants than doing research on your own. Sure, there’ll be many advertisements or calls for grant applications around your area. But, not all of these calls will apply to you. Oftentimes, the more general the grant requirements are, the harder it is to compete for the funding.

So, here are a few tips for you.

Update your business plan.

A good business plan should align with the goals of your potential grantor. Don’t change it to the point of losing your startup’s core concept, though. Otherwise, you might lose sight of why you started your business in the first place. Find a grantor whose goals closely resemble yours.

Be punctual.

Whether it’s for an interview with the grantor, or just the deadline for the submission of requirements, being on time is a good virtue. This might also pay off when you’re tied with another applicant for the grant. Knowing that you can meet deadlines will surely give plus points to your application.

Be proactive with follow-ups.

This isn’t to say that you should follow up every day. But, you should check in with them every once in a while to get updates on your application. It might also help to tell them that you can still give other information that they might need to evaluate your application. From the start, it’s best to establish good communication with your grantor.

 

Types of Small Business and Startup Grants

Small businesses and startups can benefit from grants given by different societal entities. From government to non-profits, even to philanthropists, there are six general types of grants that you should be familiar with.

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Type of Grant Best for Examples
Government Gran small, local businesses and startups looking for any grant available
Natural Resource Sales Assistance Program businesses and startups doing business involving:

  • timber and forest products
  • strategic materials
  • royalty oil
  • minerals (coal, oil, and gas)
  • surplus properties
Federal Stimulus Aid businesses and startups struggling because of unforeseen stimulus, like the COVID-19 pandemic 
Industry-Specific Small Business Grants businesses and startups looking for grants based on their demographics and business profiles in their specific line of industry
  • Black, Indigenous, People of Color (BIPOC) Small Business Grant by Annuity Payment Freedom
  • Global Problem Solver Challenge for social-issue and climate-change startups
Government Contract Assistance businesses and startups that can participate in the competitive bidding process of government procurement projects
  • Women-Owned Small Business (WOSB) Federal Contracting Program (at least five percent of federal contracting dollars given to support women in small businesses)
  • HubZone program for businesses in underutilized business zones
General Small Business Grants businesses and startups looking for funding from non-profit organizations and individuals

 

Federal Small Business Grants

The federal government gives the funds to the state governments. Grants from the federal government can partially or fully fund a small business, depending on its scope and scale. But the state governments can allocate more funds to these local businesses and startups, therefore, such grants are higher. 

Type of Federal Small Business Grant Best for What’s in it for you?
Department of Energy  (DOE) Grants

  • Small Business Technology Transfer Program (SBTTR)
  • Small Business Innovation Research Program (SBIRB)
Energy-focused small businesses and startups

Innovative technologies championed by small businesses and startups

Opportunities to work with research labs in a university or the DOE National Lab itself
USDA Rural Development Grants Small rural businesses and startups Create quality jobs for your business
Department of Justice Grants Small businesses and startups that are working on public safety projects
  • Hire professionals in community policy-making and test the drafted policies
  • Attend trainings and technical assistance organized by the office 
Department of Defense Grants

  • SBTTR
  • Defense Enterprise Science Initiative
Small businesses and startups focusing on research and development (R&D) Help achieve the R&D goals of the Office of Naval Research, the Air Force Office, and the U.S. Army Research Institute
Department of the Interior Grants Small businesses and startups from all categories Opportunities to work with agencies such as the  U.S. Fish and Wildlife Services, Indian Affairs, and the  National Park Service
National Institute of Food and Agriculture (NIFA) Grants Small businesses and startups in agriculture and food nonprofits Participation in Leadership and funding programs, as well as in other USDA programs
Natinal Institute of Health Grants Small businesses and startups in the biomedical field, including biotech startups and small businesses Establish a more secure footing in starting and building your biotech business

 

Private Small Business Grants

If none of the free government grant programs align with your startup’s concept and goal, there are still private grants that you can check out. Like they say, scour the field once more before you give up. 

Type of private small business grant Best for Grant Amount Notes
National Association for the Self-Employed (NASE) Growth Grants Growing small businesses and startups $4,000 This grant is perfect for growing your business, particularly for purchasing new equipment, hiring additional manpower, and even improving your marketing strategies.
FedEx Small Business Grants Existing small businesses and startups in need of additional funding $25,000 You’ll need to create a video that showcases your business story. The application for this grant is open for a fixed period of one month so you should have your video ready before then.
The StreetShares Foundation Veteran Business Grant Small business and startup owners who are ​​veterans, active-duty members, a spouse of a military veteran or active duty member $15,000 Work on your business idea, budget allocation, product-market relationship, and the influence of your venture to the veteran military community for better chances of being granted the funds.
Caleb Brown Urban Entrepreneur’s Community Grant Small businesses and startups in the urban area $1,000 This grant favors young entrepreneurs who can help rebuild their communities through their small businesses and startups. 
Nav’s “Legitify Your Small Business” Grant Small businesses and startups with a potential, practical solution to society $10,000 This grant’s approach is more of a contest, with a runner-up still able to take home $5,000.
Halstead Jewelry Grant Award Small businesses and startups dealing with jewelry $7,500 Aside from funds, you can also get help from Halstead to take braver steps in accomplishing your goals. 

 

Difference Between Business Grants and Business Loans

The main difference between a business grant and a business loan lies in the payback. When you get a loan, you are required to return the money you asked for at a specified date and time. Whether it’s through your business revenues, savings, or a different loan altogether, you need to pay back the loan. It might also come with an interest. 

But with business grants, that’s not necessary. Some grantors do require their beneficiaries to show proof of their accomplishments with the money they were able to get from the grant, but this is more an issue of accountability rather than a responsibility to pay back. 

 

You Might Ask

Is the government giving free money to small businesses?

Yes, the government has funds that it can give to small businesses with no payback obligation. The free money comes in the form of grants, also called “advances”, and can reach up to $10,000. 

Can startups apply for grants?

Yes, startups can apply for grants, regardless of the minimum viable product stage they’re in. Startups need to be strategic in applying for grants though, so they can maximize their use of these free funds without compromising their business credit score.

What is the $10,000 grant for small businesses?

The $10,000 grant for the hardest hit small businesses and startups during the COVID-19 pandemic is referred to as the Targeted Economic Injury Disaster Loan Advance. There’s also a Supplemental Targeted Advance which is around $5,000. Both grants are given by the US Small Business Association or SBA.

Who qualifies for an SBA grant?

An SBA business qualifies for a grant if it: 

  • is located in a low-income community
  • suffered an economic loss of at least 30 percent
  • has 300 employees or less 

Where do I get funding for my startup?

Your startup can get financial resources through pre-seed funding, series funding, grants, and even venture capital investment loans.

 

Conclusion

Telling yourself to quit on a business idea just because you have no funds for it is not something a businessman should do. More than anyone, you shouldn’t lose trust and faith in your brainchild just because the circumstances are not in your favor. 

Here, we’ve given you lists of business grants that you should definitely consider applying for to get the gears running for your venture. Keep in mind that if there’s a will, there’s always a way.

So, do you now know where to start mailing your grant applications?

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