Starting or growing a business after retirement can require money for equipment, inventory, marketing, technology, licenses, working capital, or other expenses. Seniors who want to become entrepreneurs can explore several types of small business funding, including grants, loans, microloans, local programs, and other sources of capital.
One important point is that age alone usually does not qualify someone for a federal small business grant. The U.S. Small Business Administration says it does not provide grants for starting or expanding ordinary small businesses. However, SBA offers limited grants for specific purposes and provides access to loans, resource partners, counseling, and other funding resources.
Who May Be Looking for This
Funding resources may be useful for seniors who are:
- Starting a business after retirement
- Turning a hobby into a business
- Expanding an existing small business
- Buying equipment or inventory
- Starting a home-based business
- Looking for working capital
- Exploring a second career through entrepreneurship
- Looking for local or industry-specific business programs
Your age may be one part of your situation, but funding eligibility can also depend on your business type, location, revenue, credit history, business plan, industry, and how the money will be used.
Check What You May Qualify For
OpenGrants Network helps you explore funding opportunities that may fit your situation.
- ✓ Free eligibility check
- ✓ Free guidance if needed
Available funding opportunities vary based on your location, business type, experience, financial situation, and other eligibility factors.
Types of Small Business Funding Seniors Can Explore
Small Business Grants
Grants can be attractive because they generally do not have to be repaid when the recipient follows the program's requirements. However, seniors should be careful about advertisements claiming that the federal government provides free grants to anyone who wants to start a business. SBA specifically states that it does not provide grants for starting or expanding ordinary businesses. Some legitimate grants may be available for specific industries, research and development, exporting, manufacturing, or through private organizations and local programs.
SBA Loans
SBA-backed financing can be used for many legitimate business purposes. The SBA does not generally lend directly to borrowers for its 7(a) program. Instead, participating lenders provide the loans under SBA rules and guarantees.
SBA Microloans
Microloans can be useful when a business needs a smaller amount of capital. The SBA Microloan program provides loans of up to $50,000 through nonprofit intermediary lenders. The average microloan is about $13,000. These loans can help eligible businesses with startup or expansion expenses such as inventory, supplies, equipment, and working capital.
Local Business Programs
Cities, counties, states, economic-development organizations, and community organizations may offer business assistance or financing programs. These opportunities can be easier to overlook than national programs, so checking local economic-development resources and SBA partners can be worthwhile.
Industry-Specific Funding
Some funding opportunities are limited to particular industries or business activities, such as research and development, manufacturing, agriculture, exporting, technology, or other specialized activities.
Investment Capital
Some established businesses may seek investment rather than a traditional loan. SBA-licensed Small Business Investment Companies can invest in qualifying small businesses through debt, equity, or a combination of both. Investment funding can involve giving an investor an ownership interest in the business, so it is different from a grant or conventional loan.
SBA Resource Partners
The SBA's Resource Partner network includes Small Business Development Centers, SCORE, Veterans Business Outreach Centers, and Women's Business Centers. These organizations can provide counseling, training, mentoring, business planning assistance, and help understanding funding and capital options.
How to Prepare Before Applying
- Decide how much funding you actually need and what it will be used for.
- Create a basic business plan.
- Separate personal and business finances.
- Gather income, financial, and business documents.
- Check your credit and understand your borrowing position.
- Research several funding sources and compare repayment requirements before accepting financing.