Starting a new business can require money for equipment, inventory, marketing, technology, licenses, supplies, and other startup expenses. Grants can be appealing because they generally do not need to be repaid when the recipient follows the program requirements.
However, finding legitimate grants for a new business requires some research. The federal government does not provide general grants simply for people who want to start a business. The SBA says its small-business grants are limited to specific purposes, such as research and development, exporting, manufacturing, and entrepreneurship-support organizations.
New business owners can also explore state and local programs, nonprofit opportunities, industry-specific grants, competitions, and other funding sources.
Who May Qualify
Grant eligibility depends on the specific program. Opportunities may be available to:
- New business owners
- Entrepreneurs launching a startup
- Small businesses in specific industries
- Businesses located in particular communities
- Minority-owned businesses
- Women-owned businesses
- Veteran-owned businesses
- Rural businesses
- Businesses developing new technology
- Businesses involved in research and development
- Manufacturers and businesses involved in specific supply chains
Being a new business owner does not automatically qualify you for a grant. Each program establishes its own eligibility requirements.
Check What You May Qualify For
OpenGrants Network helps you explore potential grants, funding programs, and business assistance opportunities.
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Available opportunities can vary based on your location, business type, industry, ownership, business stage, and other eligibility factors.
Types of Grants New Business Owners Can Explore
Local Small Business Grants
Cities, counties, economic-development organizations, and community organizations may offer grants or financial assistance to encourage business development in their area. Local programs can have specific requirements involving location, job creation, industry, or the use of funds.
Industry-Specific Grants
Some grants are designed for particular industries or activities rather than businesses in general. Technology, manufacturing, agriculture, research, energy, exporting, and other specialized industries may have funding opportunities that are not available to ordinary startups.
Research and Development Grants
Businesses developing innovative products or technologies may be able to explore federal research programs such as Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR). These programs are designed for qualifying small businesses conducting scientific research and development rather than ordinary startup expenses.
Manufacturing Funding
Certain federal programs provide funding connected to manufacturing and supply-chain development. Eligibility can be much narrower than a general small-business grant. New manufacturers should check current federal, state, and local opportunities rather than assuming every manufacturing program is open to startups.
Private and Nonprofit Grants
Companies, foundations, nonprofit organizations, and community groups sometimes operate their own small-business grant competitions. These programs can have different requirements, application periods, and funding amounts, so applicants should verify the organization and current application status before applying.
What If You Cannot Find a Grant
A grant is only one form of business funding. The SBA provides several financing options for eligible small businesses, including 7(a) loans, 504 loans, and microloans. SBA microloans can provide up to $50,000 through participating nonprofit intermediary lenders and may be used for expenses such as working capital, inventory, supplies, furniture, machinery, and equipment. New business owners can also explore small business loans, community lenders, business competitions, investment capital, local economic-development programs, crowdfunding, and other business assistance programs. A loan is different from a grant because it must generally be repaid.
How to Find Grants for a New Business
- Define your business clearly. Know your industry, location, ownership structure, and stage of development.
- Determine what you need funding for. Equipment, inventory, technology, marketing, research, and working capital may have different funding opportunities.
- Search federal, state, and local programs that specifically match your business activity.
- Look for industry-specific and private funding.
- Read the complete eligibility requirements and prepare your business documents.