Top 7 Grants for Small Business Startups

Starting your own business is an exciting opportunity, but it can also be challenging to find the money needed to get your ideas off the ground. That’s where grants come in – special funds provided by the government and other organizations that you don’t have to pay back. 

Let’s explore seven top grant programs that can help provide crucial early funding for your small business or startup. Whether you’re just beginning to research options or ready to apply, we’ll share tips to help strengthen your applications and guidelines for each program.

1. Federal Small Business Grants

The federal government provides several grant programs through the Small Business Administration (SBA) aimed at encouraging new businesses and jobs. One of the best options is the Community Advantage Loan Pilot Program. Administered through Community Development Financial Institutions (CDFIs), these grants of up to $25,000 do not require any payments for the first year. They can be used for various startup costs like equipment, supplies, or working capital.

Another popular federal program is the State Trade Expansion Program (STEP). The economic development agency in each state gives out grants to small businesses to help them thrive in export markets. These grants can total up to $75,000. Funds can cover expenses like foreign trade missions, export training workshops, consulting, and international trade shows. Be sure to check your state economic development office’s website for local application deadlines and guidelines.

2. Corporate Small Business Grants

Rather than just government agencies, some major corporations run grant programs to help entrepreneurship and innovation in their communities. For example, the MassMutual Foundation offers up to $25,000 through its Innovation and Technology Grant to help startups commercialize new technologies. 

Writing stand-out applications and thoroughly addressing how your company’s mission aligns with the donor organization’s goals can help you beat the odds. Research is key to finding the right corporate grants to apply for based on your industry and business objectives. Non-profits like 1 Million Cups also connect entrepreneurs directly with corporate funders.

3. State and Local Government Grants

No matter where you’re located, researching both your state and local economic development websites is worthwhile – you never know what grants could be available close to home.

4. Specialty Grants for Specific Markets

Recognizing that certain demographics face challenges, some public and private grantors aim funding at startups in certain niches. For example, the National Science Foundation’s Innovation Corps program awards up to $50,000 to science and technology ventures ready to move research into the marketplace.

For women entrepreneurs, the Wells Fargo Startup Accelerator provides up to $50,000 along with executive training and investors. Veterans starting businesses can apply for the Veteran Women Igniting the Spirit of Entrepreneurship grant of up to $15,000. Beyond opportunity-specific grants, we’ll discuss cross-cutting programs still further down.

The key is researching grants relevant to your target industry and customer base, then zeroing in on one or two with the strongest fit to dedicate time to developing a great application for. Success stories of past winners can also provide helpful tips.

5. Grants for Green and Sustainable Businesses

Several grant programs exist to support entrepreneurs creating environmentally-friendly companies as consumers want eco-friendly solutions

With funds that target ecological or social impacts, these grants acknowledge that green startups face unique challenges while playing a role in sustainability. They assist in covering the extra upfront costs of upgrades, product development, and outreach.

6. Grants for Innovation and Technology Startups

As technology progresses, so too do public and private funding sources for startups in tech and innovative fields. For example, the Small Business Innovation Research program is a federal initiative awarding over $2 billion annually through mentoring and seed funding ranging from $100,000 to $3 million for high-tech small businesses.

Some regional accelerators provide pre-seed awards as well. Investor firm Techstars administers $120,000 grants with full-time mentoring specifically for approved startups in their accelerator programs.

For science and technology ventures, regularly checking grant listing services like grants.gov and informing yourself on the latest federal, state, and city government programs focused on your domain can uncover funding that fits your company’s innovation objectives. Strong consideration should also go into applying for accelerator programs offering grant money along with value-added resources.

7. Nonprofit and Community-Based Grants

Nonprofit organizations are another source of grants for small businesses that demonstrate positive community impact with a particular mission. For example, nonprofits like Vet-To-CEO offer $5,000 grants for veteran-owned startups. Similarly, Accion provides up to $50,000 in microloans or equity-free awards for businesses creating jobs or empowering underserved groups in lower-income communities.

It’s important to thoroughly research community foundations, charities, and non-profit groups in your local area. By taking a close look at these organizations, you may find grants that perfectly match what your business wants to do. Many local funders care about things like creating new jobs, helping lift people out of poverty, and fixing up poorer neighborhoods. 

They give money to companies that will address these kinds of important issues. So be sure to highlight in your application how your startup will make a difference in the community. You should also try meeting face-to-face with these groups at business incubators, presentations where you can pitch your idea or programs run by non-profits. Going in person is a great way to find out about grant opportunities they might offer and get your startup’s name known.

Final Thoughts

As a startup, it’s important to think about all the possible funding options as part of your business plan. If you do plenty of research and don’t give up; you can find grant programs that will be just right for helping your company grow. 

Customizing your applications for each program is also really important. Be sure to show what great plans you have and how your business will benefit the community. Going to places like accelerators, incubators, and non-profits where you can learn and meet people is very helpful too. If you work hard and are persistent, startups of all types have a good chance of finding early money through grants to help them succeed.

Frequently Asked Questions (FAQs)

• I’m just starting to develop my business idea. Can I still apply for grants?

While some grants require a more developed business, there are also opportunities for very early-stage startups. Consider applying to accelerators that provide seed funding and support for turning your concept into a reality. You can also search for planning grants to help with market research, legal structure set-up, and prototyping before launching. Just be prepared to demonstrate potential community impact.

• Are there income limitations for small business grants? 

Most grants do not have income limitations, as they are intended to support starting and growing small businesses. However, some specialty grants aimed at microbusinesses, underserved groups, or community development may have income caps. Be sure to review the specific eligibility guidelines of any programs you are considering.

• What are the chances of actually getting awarded a grant?

Grant success rates vary significantly depending on the funder and level of competition. Federal programs like SBIR are very selective, while some local grants may receive fewer applicants. On average, estimates suggest that about 30% of qualified grant applications are funded. Thoroughly following guidelines, highlighting your differentiation, using available resources, and applying for suitable new opportunities can improve your chances over time.