Small business grants are money that does not have to be repaid, but they are competitive, specific and rarely available to every owner.
Small business grants versus loans
A loan must be repaid with interest. A grant generally does not, but it comes with rules and a competitive process. This article is general information, not financial advice. Many owners find loans and savings more realistic for a start, and our guide on business funding options compares them.
- Grants usually need not be repaid
- They come with rules and reporting
- Competition is strong
Who qualifies for small business grants
Grants are often aimed at specific groups or purposes, such as research, certain industries, local development, or businesses owned by particular groups. Eligibility, deadlines and requirements vary widely. Read each program carefully before you spend time on an application.
- Specific industries or purposes
- Local or regional programs
- Defined eligibility rules
Where to search for small business grants
Start with official sources. The official U.S. government business guide lists funding resources, and the SBA explains its loan programs and related help. State and local economic development offices sometimes run programs, and your local SBDC can point you to them for free.
- Official government resources
- State and local development offices
- Your local SBDC
Preparing a strong small business grants application
Have your documents ready: a clear plan, financial records and your registrations. Our guide on legal basics for starting a business lists what to have in order, and our guide on bookkeeping basics helps with the numbers. Follow the instructions exactly and meet every deadline.
- A clear plan and budget
- Organized financial records
- Follow instructions exactly
Grant scams to avoid
Be wary of anyone who charges a fee to “find” or “guarantee” a grant, says you were selected for a grant you never applied for, or asks for payment details to release funds. Real government programs do not work that way. The SBA explains how to report fraud, and our guide to business opportunity scams lists more warning signs.
- Fees to guarantee a grant
- Unrequested “you have been selected” messages
- Requests for payment details
Plan B if you do not win
Treat any grant as a bonus rather than the plan. Build your budget so the business can start without it, and keep records for the next round. Free mentors at SCORE can help you review an application before you send it.
- Do not depend on a grant
- Keep your application for next time
- Ask a mentor to review it
Related reading on small business grants
- Business Funding Options: A Plain-English Guide for New Owners
- Legal Basics for Starting a Business: A Checklist
- Bookkeeping Basics for Small Business Owners
- Business Opportunity Scams: 12 Red Flags to Check
- Business Line of Credit: How It Works and What to Ask
- Business Credit Score: What It Is and How to Build It
- USA.gov guide to starting a business
- SBA loan programs
- America’s SBDC small business advising
- SCORE free business mentoring
- SBA guidance on reporting fraud
