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Does your startup need funding? Grants offer free money to good applicants, but they're not as easy to apply for as you might think.
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Free money to start a small business sounds too good to be true, but it’s possible to score free funding with a small business grant. Startup grants do come at a price: finding the right grant takes time, the application process can be lengthy, and competition is fierce.
Don’t let this deter you, if you are trying to start a business with little to no money.
As long as you set realistic expectations, we encourage you to apply for grants you’re qualified to receive. This guide can help you identify the best startup grants and tips for applying.
Table of Contents
Not all startups are qualified for business grants. Organizations that run grant programs want to invest in businesses that truly deserve funding and will put the grant money to good use. This includes:
If none of these categories really describes your startup, you may need a startup loan or other financing to fund your business.
Grants usually have a narrower scope than loans, meaning that each grant is usually for a specific type of business or purpose. This can refer to anything from specific industries to localities, the demographics of the business owner, or to a specific problem the grant is trying to address.
Let’s take a look at some of the more common categories.
Many startup business grants are for innovators and businesses that create novel, potentially disruptive products. These grants are generally for entrepreneurs in technology, medicine, science, agriculture, education, and research and development.
If this sounds like your business, get started with these options:
There are some public and private grants for green businesses, including startups. Generally, these grants cover the cost of installing sustainable infrastructure and/or energy systems. Some examples include:
Various grants aim to stimulate the economy in rural and economically distressed areas. These grants serve to attract new businesses to struggling regions. Grants include:
There are a number of women-owned business grants available. Additionally, some grant money goes to businesses that create solutions that benefit women and families. If your startup is woman-owned, you may qualify for grants such as:
Nonprofit startups that have 501(c)(3) status with the IRS are eligible for government and private grant money. Nonprofit startup grants include:
Veteran business grant money includes retraining grants for veterans returning to civilian life and grants to nonprofits providing services to veterans. Some good places to start looking for grants for veteran-owned businesses include:
The more active categories of grants are those aimed at businesses that are at least 51% owned by an individual classified as a minority.
Some potential grants for minority-owned businesses include:
Whatever your specific industry, you may be able to find a grant program dedicated to helping businesses in your sector excel. Usually, these highly-targeted grants are offered by industry organizations or private companies. Some examples include:
At the start of your business grant search, make sure you spend plenty of time researching to find out if there are any grants available for your specific industry/business type.
There are general small business grants available to any kind of business, but they are very competitive, so you will need an impressive story to wow the judges.
An impressive track record is a particular challenge for a startup business, which is usually defined as a business that’s been around for less than six months. But if your business has achieved a lot in its short operating time or you have an amazing idea, it’s worth applying to these small business grant contests.
A few grant programs include:
You may also be able to find general startup business grants open to businesses in your town, city, county, or state.
Getting a grant means competing to stand out from the crowd of other applicants. While every grant is slightly different in terms of qualifications and expectations, here are some general tips for applying for grants.
Unless your business or startup is highly innovative and provides a demonstrable benefit to your community or the world at large, you are probably not grant-recipient material.
Even if you are eligible for some grant money and make it through the lengthy proposal process, you may only land a few hundred to a few thousand dollars.
Furthermore, startup business grants are incredibly hard to come by, as grantees will generally want to see what kind of results you’ve achieved on other projects carried out by your organization. Don’t fall for government grant scams that will have you believe there are piles of free grant money out there for the taking — this is not the case at all.
Rather than hoping to be among the fortunate few granted free money, you might want to look into grant alternatives for your business.
Alternatives for new business grants include crowdfunding, online loans, equipment financing. Consider these options if you’re ready to get your startup business off the ground. Good luck!
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