Every small business owner dreams of finding funding that doesn't come with a repayment schedule attached. Small business grants offer exactly that - money awarded to your business that you never have to pay back. From federal agencies to private corporations to local nonprofits, grant opportunities exist across nearly every industry, business type, and demographic. The challenge isn't whether grants exist; it's knowing where to look, how to qualify, and how to craft a winning application.
That said, grants are fiercely competitive. Thousands of businesses apply for a limited pool of funds, and the application process can be time-consuming and demanding. Many business owners spend months pursuing grants only to come up short - and during that waiting period, their businesses still have bills to pay, inventory to buy, and staff to compensate. That's why the smartest funding strategy combines grant applications with reliable business financing. Grants can fund innovation and growth; loans and lines of credit keep the lights on while you pursue them.
This guide covers everything you need to know about small business grants - what they are, where to find them, how to apply, and how to use them alongside other financing tools to build a resilient business funding strategy.
In This Article
A small business grant is a sum of money awarded to a business by a government agency, corporation, nonprofit, or foundation - with no repayment required. Unlike a loan, you don't owe interest, you don't make monthly payments, and you don't give up equity. The money is yours to use for the stated purpose of the grant.
That said, grants are not truly "free" in the sense that they come without obligations. Most grants come with strings attached. You'll typically be required to:
The key distinction between grants and loans is ownership: a loan is borrowed capital you must repay with interest; a grant is awarded capital you keep as long as you fulfill the grant's conditions. For this reason, grants are among the most desirable forms of business funding - and among the most competitive.
Key Insight: Grants Are Competitive, Not Guaranteed
The average acceptance rate for competitive small business grants is less than 10%. Many federal programs receive thousands of applications for a handful of awards. Start your grant search early, apply broadly, and always have a backup financing plan in place.
For a deeper look at the strategic differences between grants and loans - including when to pursue each - see our full comparison: Grants vs. Loans: Which Is Right for Your Business?
Grant opportunities fall into several broad categories, each with its own eligibility requirements, funding amounts, and application processes. Understanding the landscape helps you focus your search on programs you're actually qualified for.
Federal grants are funded by U.S. taxpayer dollars and administered through agencies like the Small Business Administration (SBA), the U.S. Department of Agriculture (USDA), and the Economic Development Administration (EDA). These grants often focus on innovation, rural development, job creation, and underserved communities. Federal grants tend to be larger but are highly competitive and require rigorous documentation.
Every state has economic development agencies that offer grants to attract and grow businesses within their borders. Local municipalities, county governments, and regional development authorities also offer targeted grants. These programs are often less competitive than federal grants and may be easier to access if you're creating local jobs or serving a specific community need.
Many major corporations - from FedEx and Visa to Amazon and Google - run small business grant competitions as part of their corporate social responsibility programs. Private foundations also fund business development, particularly for underserved entrepreneurs. Corporate grants often have creative competition elements (business plan pitches, video submissions) alongside standard applications.
Nonprofits focused on economic development, women's empowerment, minority advancement, and veteran support often administer their own grant programs or partner with government agencies to distribute funds. Organizations like Hello Alice, IFundWomen, and the Minority Business Development Agency (MBDA) connect entrepreneurs with both grant opportunities and wraparound support services.
Many grants target specific industries - agriculture, clean energy, healthcare, technology, and manufacturing are common focal points. If your business operates in a grant-friendly industry, look for sector-specific programs from professional associations, industry foundations, and government agencies that oversee your sector.
Federal grant programs represent some of the largest available pools of funding for small businesses. Here's what you need to know about the major players:
It's important to clarify a common misconception: the Small Business Administration (SBA) does not directly award grants to most small businesses for starting or expanding a business. The SBA's primary role in funding is through guaranteed loan programs, not direct grants. However, the SBA does administer or partner with programs that provide grant-adjacent support, and it directs entrepreneurs toward legitimate grant opportunities through resources like Grants.gov.
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are among the most significant sources of federal grant funding available to small businesses. These competitive programs fund early-stage research and development across 11 federal agencies, including the Department of Defense, NIH, NASA, and NSF.
SBIR/STTR is ideal for technology companies, life sciences firms, and businesses developing innovative products or processes. If your business has a research and development component, these programs should be at the top of your list.
The U.S. Department of Agriculture (USDA) offers several grant programs specifically for rural businesses and agricultural enterprises. The Rural Business Development Grant (RBDG) program funds technical assistance and training for small, emerging businesses in rural areas. The Value-Added Producer Grant (VAPG) helps agricultural producers increase the value of their goods. If your business is located in a rural area or serves a rural community, USDA programs deserve a close look.
The EDA provides grants to communities and organizations (not directly to individual businesses) to support economic development infrastructure. However, small businesses can benefit indirectly through EDA-funded incubators, accelerators, and technical assistance programs. Check with your local economic development organization to see if they receive EDA funding that could benefit your business.
Grants.gov is the official federal database of grant opportunities. You can search by keyword, agency, eligibility, and funding amount to find programs relevant to your business. Register an account and set up alerts for new opportunities in your field.
Pro Tip: Watch Out for Grant Scams
Legitimate federal grants are listed on Grants.gov and agency websites. You should never pay a fee to apply for a government grant. If someone contacts you promising grant money in exchange for an upfront payment, it's a scam. Always verify opportunities through official government sources.
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Apply in Minutes - Get Funded FastWomen entrepreneurs have access to a growing ecosystem of grant programs designed to close the funding gap that has historically disadvantaged women-owned businesses. According to data tracked by the SBA, women-owned businesses represent a significant and growing share of U.S. small businesses - and funders have taken notice.
One of the most well-known grants for women, the Amber Grant awards $10,000 each month to a woman entrepreneur, plus a $25,000 annual grant at year-end. Applications are simple and accessible, making this an excellent starting point for women business owners. The grant was founded in memory of a young woman who died before she could pursue her entrepreneurial dreams.
IFundWomen is a funding platform and community specifically for women entrepreneurs. Beyond grants, IFundWomen offers coaching, a network of female founders, and connections to corporate grant partners. Their marketplace regularly features new grant opportunities from corporate sponsors ranging from a few thousand to tens of thousands of dollars.
The Eileen Fisher grant awards up to $100,000 annually to women-owned businesses that center social and environmental sustainability. It's one of the larger private grants available to women entrepreneurs and is particularly well-suited for businesses with a mission-driven component.
The Tory Burch Foundation offers fellowships that combine education, mentorship, and access to capital for women entrepreneurs. Fellows gain access to affordable business loans through Bank of America, as well as a robust community of support.
While the SBA doesn't offer direct grants to women-owned businesses, it operates Women's Business Centers (WBCs) in nearly every state. These centers provide training, counseling, and connections to grant opportunities specifically tailored to women entrepreneurs. They can be invaluable resources for identifying and applying for women-focused grants.
If you're a woman-owned business exploring all your financing options, our guide to business loans for women-owned businesses covers additional funding strategies beyond grants.
Minority entrepreneurs have historically faced significant barriers to business financing. A growing number of grant programs specifically address this gap, offering targeted funding for Black, Hispanic, Asian-American, Native American, and other minority business owners.
The MBDA is a federal agency within the U.S. Department of Commerce dedicated to the growth and global competitiveness of minority-owned businesses. While the MBDA doesn't directly give grants to businesses, it operates a network of Business Centers that provide technical assistance, access to capital, and connections to grant opportunities. The MBDA also tracks and publicizes grant programs relevant to minority entrepreneurs.
Hello Alice is a platform that provides business owners - with a particular focus on underrepresented entrepreneurs - with access to grants, business education, and community support. Hello Alice regularly partners with corporate sponsors to offer small business grants ranging from a few thousand dollars to six-figure awards. Their platform is free to join and easy to navigate.
The NMSDC's certification for minority-owned businesses (MBE certification) opens doors to supplier diversity programs, corporate partnerships, and grant opportunities. Many corporations that award grants to minority businesses require or prefer NMSDC certification.
Corporations including JPMorgan Chase, Wells Fargo, Bank of America, Comcast, and others run substantial grant programs specifically for minority-owned businesses. JPMorgan Chase's Entrepreneurs of Color Fund and Comcast RISE are two notable examples that have awarded millions to minority entrepreneurs. Check the corporate responsibility pages of major companies in your region and industry.
Many states have dedicated programs for minority business development that include grant components. Search for your state's Minority Business Office or Office of Supplier Diversity for locally available programs.
For financing options tailored to minority business owners, see our guide to business loans for minority-owned businesses.
Veterans who transition to entrepreneurship have access to a dedicated set of grant programs, often supplemented by mentorship and training resources. These programs recognize the discipline, leadership, and experience that veterans bring to business ownership.
Hivers and Strivers is an angel investment group that focuses on businesses started by U.S. Military Academy graduates. While structured as an investment group rather than a pure grant program, they provide early-stage funding in the range of $250,000 to $1,000,000 to veteran-owned startups.
The StreetShares Foundation has provided grants and scholarships specifically to veteran-owned small businesses and military spouses. Their Veteran Small Business Award has historically offered cash grants to support veteran entrepreneurship. Check their current offerings as programs evolve regularly.
Boots to Business is an SBA entrepreneurship education program offered through the Transition Assistance Program (TAP) for transitioning service members, veterans, and military spouses. While it's a training program rather than a direct grant, it provides the business plan development skills and network access that are essential for competing for grants.
For veterans interested in franchising, VetFran offers discounted franchise fees and connections to financing programs. Some franchise systems offer grants or reduced startup costs specifically for veteran franchisees.
Most states offer some form of support for veteran-owned businesses, from tax incentives to grant programs. Many states have a dedicated Office of Veterans Business Development. Checking with your state's economic development agency is an important step in any veteran's grant search.
Explore dedicated financing options in our guide to business loans for veteran-owned businesses.
While federal grants often get the most attention, state and local grant programs can be significantly easier to access and may be better matched to your specific business situation. Because state and local programs serve smaller geographic areas, competition is typically lower than for national programs.
Start with these resources to find grants in your area:
Common categories of state and local grants include:
State-Specific Grant Resources
To find grants in your state, visit your state's official government website and search for "small business grants" or "economic development." Many states maintain a searchable database of available programs. You can also visit Grants.gov and filter by state to find federally-funded programs distributed at the state level.
Some of the most accessible and well-funded grant programs for small businesses come not from government agencies but from corporations and private foundations. These organizations run grant competitions as part of their corporate social responsibility, community investment, or supplier diversity programs.
The FedEx Small Business Grant Contest awards cash prizes and FedEx print and business service credits to small businesses. The contest has awarded millions of dollars to small businesses across the country. Applications are judged on business concept, growth strategy, and community impact. Any U.S.-based business with 99 or fewer employees can apply.
Visa runs a global startup program that includes competitions for businesses developing innovative payment solutions or financial technology. If your business operates at the intersection of commerce and technology, the Visa Everywhere Initiative is worth exploring.
Amazon has run various small business grant programs through initiatives like Amazon's Black Business Accelerator and Amazon Launchpad. These programs have provided cash grants, advertising credits, and business support to small businesses, particularly those owned by underrepresented entrepreneurs. Check Amazon's current CSR programs for active opportunities.
Google offers several programs that provide value to small businesses, including Google Ad Grants (primarily for nonprofits) and Google for Startups, which provides cloud credits, mentorship, and access to investor networks for eligible startups. While not direct cash grants to all small businesses, these programs can provide significant in-kind value.
Walmart and Sam's Club have run grant programs specifically for small and diverse businesses. Their community grant programs have provided funding to businesses across a wide range of industries, with a focus on community impact.
Visit the "Community," "Corporate Responsibility," or "Supplier Diversity" sections of major corporations' websites. Sign up for newsletters from platforms like Hello Alice, GrantWatch, and Instrumentl that aggregate corporate and foundation grant opportunities. Set up Google Alerts for terms like "small business grant contest" and "[your industry] + grant."
A strong grant application is the difference between winning and losing - even when your business is fully eligible. Here's a step-by-step approach to applying for small business grants effectively:
Before investing time in an application, confirm that you meet all eligibility requirements. Review the grant's stated purpose and ensure your business aligns clearly with it. Read previous grant recipients' profiles to understand what funders are looking for. Identify the application deadline and all required materials well in advance.
Most grant applications will require some combination of the following. Have these ready before you start:
Your grant proposal is your pitch. It needs to clearly answer: Why does my business deserve this grant? Address the following in your proposal:
Many strong applications are disqualified for failing to follow instructions. Submit all required documents. Stay within word or character limits. Format your submission as required. Submit before the deadline - most grant portals do not accept late submissions.
After submitting, confirm receipt of your application. If the funder provides feedback sessions or Q&A opportunities, participate. If you don't win, ask for feedback to improve future applications. Many successful grant winners applied multiple times before receiving an award.
Don't put all your eggs in one basket. Identify 5 to 10 grants you're well-qualified for and apply to all of them. Grant writing is a skill that improves with practice, and casting a wider net dramatically improves your odds of winning at least one award.
Grants and loans are not competing funding options - they're complementary tools that serve different functions in a comprehensive business funding strategy. Understanding when to use each, and how to use them together, is key to building financial resilience.
| Factor | Small Business Grants | Business Loans |
|---|---|---|
| Repayment Required | No | Yes - with interest |
| Competition Level | Very high (often <10% acceptance) | Moderate (qualification-based) |
| Time to Funding | Months to over a year | Days to weeks |
| Funding Amount | Varies widely ($1K to $2M+) | Flexible, often larger |
| Use of Funds | Restricted to grant purpose | Generally flexible |
| Impact on Credit | Minimal | Builds credit history |
| Best For | R&D, specific projects, targeted needs | Working capital, growth, cash flow |
| Equity Given Up | No | No (debt financing) |
The most effective funding strategy for most small businesses is to pursue grants aggressively while maintaining access to reliable loan products for day-to-day needs and immediate growth opportunities. Grants fund your innovation and long-term projects; working capital loans keep your operations running. A business line of credit gives you on-demand access to funds when opportunities or emergencies arise - regardless of where your grant applications stand.
Crestmont Capital is a leading U.S. business lender with a track record of helping small businesses access fast, flexible funding. We understand that small business owners often juggle multiple funding strategies simultaneously - and we're built to fit into that picture.
Here's how Crestmont can support your overall funding strategy while you pursue grants:
Explore all of our small business funding options at the Crestmont Capital Small Business Financing Hub.
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Check Your Funding Options NowAbstract strategy becomes clearer with concrete examples. Here are three real-world scenarios showing how grants and loans can work together:
A small software company developing AI-powered diagnostic tools for healthcare applied for and received a Phase I SBIR grant from the National Institutes of Health worth $275,000 for a feasibility study. The grant covered R&D costs - researcher salaries, equipment, and testing. But the company still needed to cover operating expenses: rent, administrative staff, and customer acquisition costs during the 12-month research period.
The founders secured a $150,000 working capital loan from Crestmont Capital with a flexible repayment schedule tied to their projected revenue. The grant funded the innovation; the loan kept the business operational. When Phase I concluded successfully, the company applied for Phase II funding of $1.5 million - which they received - and used their Phase I outcomes as proof of concept to raise their Series A round.
A woman-owned artisan bakery in a mid-sized city applied for and won a $15,000 Amber Grant, which she used to purchase a commercial-grade oven and upgrade her packaging equipment. The grant unlocked production capacity she couldn't have afforded otherwise. But as her output increased, so did her working capital needs - ingredient purchases, packaging supplies, and delivery costs scaled with demand.
She opened a $50,000 business line of credit with Crestmont Capital, drawing on it during her high-production months and repaying when large wholesale orders settled. The combination of a one-time grant for capital equipment and a revolving line of credit for ongoing working capital gave her a stable, scalable financial foundation.
A veteran-owned construction company received state workforce training grants to certify its crews in specialized safety and technical procedures - a $20,000 value that fully covered training costs the business would otherwise have paid out-of-pocket. With certified workers, the company qualified for larger commercial contracts. To fulfill a new $400,000 contract, the owner needed to purchase equipment: an excavator, trailers, and specialized tools.
Rather than depleting cash reserves, the owner used equipment financing through Crestmont Capital, preserving working capital while acquiring the equipment needed to execute the contract. The grant investment in workforce training directly enabled the contract win; the equipment financing made it executable.
Small business grants do not require repayment, which makes them "free" in the sense that you don't owe the money back. However, grants come with conditions. You must use the funds for the specified purpose, submit progress reports, and meet ongoing eligibility requirements. Misuse of grant funds can result in having to return the money. Think of grants as awarded funding with responsibilities attached, rather than unconditional free money.
Eligibility varies by program. Common criteria include business size (revenue or employee count), years in operation, geographic location, industry sector, ownership demographics (woman-owned, minority-owned, veteran-owned), and the intended use of funds. Some grants are open to any small business while others are highly targeted. Always review eligibility requirements carefully before investing time in an application.
Start with Grants.gov for federal opportunities and your state's economic development website for state programs. Platforms like Hello Alice, IFundWomen, and GrantWatch aggregate private and corporate grants. Your local SBDC or SCORE chapter can provide personalized guidance. Chambers of commerce are also good resources for locally-specific programs.
Grant timelines vary significantly. Small corporate grants may be awarded within a few months of application. Federal grants like SBIR can take 6 to 12 months or more from application to award. Factor in the time to research, prepare a strong application, and wait for decisions - often a year or more passes between first identifying a grant and receiving funds. This is why maintaining access to business loans or lines of credit is so important during the grant-seeking process.
Yes, startups can apply for many grants - especially those focused on innovation and research (like SBIR), specific demographics, or community impact. Some grants specifically target early-stage businesses. However, many grant programs require at least one or two years of operation. Startups should focus their search on programs explicitly open to new businesses and be prepared to demonstrate their business plan and potential impact clearly.
Most competitive grants require at minimum an executive summary or project description, and many require a full business plan. A strong business plan demonstrates that you've thought through your market, operations, finances, and growth strategy. If you don't have a business plan, your local SBDC or SCORE mentor can help you create one for free. A well-crafted business plan also strengthens your loan applications.
In most cases, yes - business grants are considered taxable income by the IRS. The grant funds should be reported as income on your business tax return, and you may owe federal and state income taxes on the amount received. Consult with a tax professional before and after receiving a grant to understand your tax obligations. Some grants may have specific tax treatment, so always verify with your accountant.
The Small Business Innovation Research (SBIR) program is a competitive federal grant program that funds early-stage R&D in technology, science, and innovation. To qualify, your business must be for-profit, U.S.-based, and have fewer than 500 employees. The principal researcher must be primarily employed by your company. SBIR awards are competitive and reviewed by technical experts - a strong scientific or technical proposal is essential. The program is administered by 11 federal agencies.
A grant is awarded funding that you don't have to repay, while a loan is borrowed capital that must be repaid with interest over a set term. Grants are highly competitive and restricted in how you can use the funds. Loans are more accessible, flexible in use, and available faster - but they come with repayment obligations. Most businesses benefit from using both: grants for targeted projects and innovation, and loans for working capital, cash flow, and growth opportunities.
Yes - and you should. Applying to multiple grants simultaneously is not only allowed but recommended. Because acceptance rates are low, casting a wide net significantly improves your overall odds of winning. Some grants may have restrictions on receiving multiple awards from the same program, but receiving awards from different grant programs is generally permitted. Disclose existing grants as required in applications.
Very. Federal grants like SBIR Phase I typically see acceptance rates of 10 to 20 percent from eligible applications. Nationally recognized corporate grants often receive thousands of applications for a handful of awards. State and local grants tend to be less competitive due to the smaller applicant pool. Improving your odds requires thoroughly meeting all eligibility criteria, submitting a compelling proposal, and applying to multiple programs consistently over time.
Minority business grants are grant programs specifically designed to support businesses owned by members of minority groups, including Black, Hispanic, Asian-American, Native American, and other underrepresented entrepreneurs. These programs aim to reduce historical funding disparities and support economic equity. Sources include federal agencies like the MBDA, private corporations, and nonprofit organizations. Platforms like Hello Alice and GrantWatch aggregate available opportunities.
Women-owned businesses have access to dedicated grant programs including the Amber Grant (up to $25,000 annually), IFundWomen's marketplace of corporate-sponsored grants, the Eileen Fisher Women-Owned Business Grant (up to $100,000), Tory Burch Foundation Fellowships, and various state-level programs through SBA Women's Business Centers. Corporate programs from major companies also increasingly target women entrepreneurs.
The SBA does not typically give grants directly to individual small businesses for starting or expanding a business. The SBA primarily supports small businesses through guaranteed loan programs and technical assistance. However, the SBA does administer some grant programs in specific circumstances (such as exporter assistance), and it directs businesses to legitimate grant opportunities through resources like Grants.gov. The SBA's SBIR and STTR programs provide R&D grants to eligible technology-focused small businesses.
A winning grant proposal clearly aligns your business's needs and goals with the grant program's objectives. It tells a compelling story: who you are, what problem you're solving, how you'll use the funds, and what impact the grant will have. Be specific and concrete - use data and examples wherever possible. Follow all formatting and length guidelines exactly. Proofread rigorously. Get feedback from your SBDC counselor, SCORE mentor, or other business advisors before submitting. Persistence matters: many grant winners applied to the same program multiple times.
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Apply Now - Fast ApprovalsDefine Your Business Profile
Document your business type, industry, years in operation, revenue, location, and ownership demographics. This profile determines which grants you're eligible for and should be ready to paste into any application.
Search Federal, State, and Local Databases
Visit Grants.gov for federal programs. Go to your state's economic development website. Contact your local SBDC or SCORE chapter. Create a list of 8 to 12 grants you qualify for and note each deadline.
Gather Your Documentation
Compile your business plan, financial statements, tax returns, ownership documents, and EIN. Having a "grant application package" pre-assembled saves significant time when deadlines hit.
Write Compelling Proposals
Tailor each proposal to the specific grant's stated goals. Be specific about how funds will be used and what impact they'll have. Get a review from your SBDC counselor or SCORE mentor before submitting.
Secure Your Financing Safety Net
Don't wait for grant decisions to fund your business needs. Apply for a business line of credit or working capital loan through Crestmont Capital so you have reliable funding available regardless of grant outcomes. Apply here.
Apply, Track, and Persist
Submit your applications before deadlines. Track the status of each. Ask for feedback when you don't win. Reapply to programs you're a strong fit for. Grant success often comes to those who are persistent, not just those who apply once.
Small business grants represent one of the most valuable - and underutilized - sources of business funding available today. From federal innovation programs like SBIR to targeted grants for women, minority, and veteran entrepreneurs to corporate competitions and state economic development programs, opportunities exist across virtually every business type and industry. The key is knowing where to look, understanding the requirements, and putting in the work to craft competitive applications.
But grants are not a funding strategy on their own. They're competitive, slow, and restricted in how funds can be used. The most successful small business owners treat grants as one component of a comprehensive funding approach - pairing them with fast, flexible business loans and lines of credit that keep operations moving forward while applications are pending and decisions are being made.
Crestmont Capital is here to be the reliable financing partner in that equation. Whether you need working capital to bridge a funding gap, a line of credit for flexibility, or a term loan to fuel growth, our team can help you find the right product fast. Explore your options at the Crestmont Capital Small Business Financing Hub or apply now to get started today.
Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.