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Securing the funds you need to get your business off the ground is one of the biggest challenges small business owners face. Fortunately, there are resources specifically designed to help you overcome this problem—and no, we don’t just mean loans. Small business grants are a way to get the funds you need to support operations without having to worry about interest rates and monthly payments.
There are several ways to go about getting a small business grant, and we’ll cover them—and more—in this guide. Keep reading for a comprehensive overview of small business grants, or use the links below to jump to a specific topic.
What are small business grants?
Types of small business grants
How to apply for a small business grant
Resources to guide you
Frequently asked questions
What are small business grants? Small business grants are a small to medium amount of money that’s given to you to help fund your business. Many grants are offered by the federal government, but you can also find grants through educational institutions, nonprofits, corporations, or other organizations.
There are many grants that are designed to help entrepreneurs further their business initiatives. Simply put, grants raise capital for your business without you needing to take out a loan, rack up credit card debt, or give up ownership. The main benefit of business grants is the money awarded doesn’t need to be paid back.
Wait… that sounds like free money. That’s a common perception, but it’s hardly the case. Most grant programs have a fairly rigorous application process. It often requires a well-crafted business plan, detailed reporting (like financial statements), and a business idea rooted in serving the greater good.
Usually, the entities that offer grants are looking to support businesses that align with their mission in some way. For instance, an ocean advocacy organization may offer grants to companies that specialize in products that reduce plastic pollution.
Depending on the type of grant, the funding prerequisites or motivations may vary. While there isn’t a repayment requirement, there are expectations, such as transparency and reporting, that help hold grant recipients accountable.
What is the difference between a small business grant and a small business loan?
With small business loans, you are expected to pay the money back to the lender. However, with small business grants, there is no repayment requirement. Another major difference between grants and loans is that grant money is typically restricted to certain uses. When applying for grants, there should be guidelines that specify what grant money can be used for.
Types of small business grants The different types of grants available for small businesses are nearly endless. However, not every grant is going to be applicable to your small business, so it’s important to learn more about the grants before applying. Many grants target specific initiatives such as scientific research, technical assistance, or economic development in rural areas—meaning eligibility is limited.
To help you get started, here are some of the most common types of grants and examples of potential grants you can apply for.
