Ultimate Guide to Small Business Grants

Small business grants are a form of non-repayable funding offered by government agencies, nonprofit organizations, and private companies to help entrepreneurs cover expenses or spur growth.

Unlike loans, grants do not need to be paid back (unless the recipient violates grant terms). Grants are highly attractive to small businesses because they provide free funding, but they are also very competitive and often targeted to specific goals or sectors.

For example, many government grants for small businesses require meeting strict eligibility criteria (such as being in a certain industry, region, or demographic group) and come with detailed reporting requirements.

In practice, most small businesses can’t easily get grants simply to start or expand a venture – the U.S. government generally does not fund arbitrary business launches. The SBA itself notes that it “does not provide grants for starting and expanding a business”.

Instead, federal grants tend to go to research and development projects, economic-development initiatives, or support organizations. Despite these challenges, dozens of federal, state, and private grant programs exist that small business owners can pursue.

This guide provides an up-to-date overview of small business grants in the U.S. for 2025. We cover federal grant programs, state and local opportunities, and private/nonprofit grant sources.

We explain how the application process works, share eligibility tips, and list key resources. By understanding the landscape and preparing carefully, a small business can identify relevant grants and improve its chances of winning this “free” funding.

Federal Small Business Grant Programs

Federal agencies offer a range of grant programs that small businesses may qualify for, especially in areas like research & development, manufacturing, and export promotion. Below are some major federal grant sources:

SBIR and STTR (America’s Seed Fund) – The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide non-dilutive R&D funding to technology-focused small businesses through 11 federal agencies.

These programs award grants (and sometimes contracts) in phases for developing innovative products and moving them toward commercialization.

As of late 2024, SBIR/STTR Phase I awards can be up to about $314,000, and Phase II up to about $2.1 million. Collectively, SBIR/STTR is “an important source of early-stage technology funding for small businesses”.

Small business owners can apply for SBIR/STTR by responding to agency solicitations on Grants.gov or the SBIR portal. (SBIR grants are highly competitive and often require partnership with research institutions for STTR.)
U.S. Small Business Administration (SBA) Special Grants – The SBA itself does not give grants for general business start-ups or expansions.

Instead, SBA-related grants generally fund support organizations (like Small Business Development Centers and women’s business centers) or special initiatives. For example, SBA has manufacturing grants under its Made-in-America initiative to train and empower small manufacturers.

SBA also administers the SBIR/STTR programs and provides grants for community organizations that promote entrepreneurship (such as veteran-focused business centers and SBDCs).

Moreover, SBA runs the State Trade Expansion Program (STEP), which channels federal funds through state agencies to help small exporters participate in trade missions, develop marketing, and enter foreign markets.

In short, SBA’s own grants mostly support counseling, training, and export assistance, rather than direct startup capital.
U.S. Department of Agriculture (USDA) – USDA offers several grant programs for rural businesses and ag-related innovation.

The Rural Business Development Grants program, for example, provides funding (often between $10,000 and $500,000) to support business development and technical assistance in eligible rural areas.

(Note: USDA RBDG grants are generally reserved for nonprofits, cooperatives, and public organizations rather than for-profit businesses.) Additionally, USDA runs its own SBIR program focused on agriculture and food systems.
U.S. Department of Commerce (EDA and MBDA) – The Commerce Department’s Economic Development Administration (EDA) awards grants for projects that spur economic development and job creation in regions, including infrastructure, research, and technical assistance projects.

While many EDA grants go to local governments and universities, the funded projects indirectly benefit small businesses (for example, by improving business parks, broadband, workforce training, etc.).

The Commerce Department’s Minority Business Development Agency (MBDA) provides grants and cooperative agreements to advance minority-owned businesses. For instance, MBDA funds minority business centers and targeted growth initiatives throughout the year.
U.S. Department of the Treasury (CDFI Fund and SSBCI) – The Treasury’s Community Development Financial Institutions (CDFI) Fund awards grants to community lenders and small business assistance organizations serving low-income areas (which in turn lend or grant to entrepreneurs).

Also, the State Small Business Credit Initiative (SSBCI) is a $10 billion federal program managed by the Treasury that provides funds to states to bolster small business access to capital.

SSBCI funds support state-run loan, equity, and guarantee programs – and include technical assistance grants to entrepreneurs – but these funds are administered at the state level (see next section).

Below is a summary table of several prominent federal and quasi-federal small business grant programs:

Program	Agency/Source	Focus/Eligibility	Typical Award
SBIR/STTR (America’s Seed Fund)	SBA + participating federal agencies	R&D in technology/innovation (tech, biotech, defense, etc.)	Phase I: up to ~$314K; Phase II: up to ~$2.1M (as of 2024)
USDA Rural Business Grants	USDA	Rural business development (nonprofits/coops in rural areas)	Range approx. $10K – $500K (program dependent)
EDA Economic Development Grants	U.S. Commerce (EDA)	Regional economic projects (infrastructure, planning, etc.)	Varies widely; often hundreds of thousands to millions
MBDA Business Grants	U.S. Commerce (MBDA)	Minority-owned business support, business centers	Varies; often $50K+ to support business expansion
SBA STEP (State Trade Expansion)	SBA via states	Export assistance for small businesses (through states)	Grants to states; benefits small exporters (funds for trade shows, marketing)
SBA Made-in-America (Manufacturing)	SBA	Strengthen small U.S. manufacturers	Varies; examples include workforce training grants
Grants.gov	Gov’t wide database	Central portal for all federal grants (SBIR, EDA, etc.)	Searchable by category (varies by program)

Any business owner interested in federal grants should regularly monitor Grants.gov. The SBA notes that federal grant opportunities for small businesses are listed on Grants.gov, where applicants can search by criteria like eligibility and agency.

Because federal grants involve strict requirements and competition, it is critical to only apply for grants where your business clearly fits the criteria and needs.

State and Local Grant Opportunities

Beyond federal programs, each state and many local governments run their own grant programs for small businesses. These tend to be more specialized and vary widely by state. For example, states may offer:

Industry-Specific Grants. Some states allocate grant funds to encourage growth in targeted industries (technology, clean energy, agribusiness, tourism, etc.).

For instance, New York has funded tech startup grants under its state economic development agencies, while Colorado might run clean energy innovation grants.
Geographic/Community Grants. Many states and cities have grants to support businesses in economically distressed areas or to revitalize downtowns. For example, some rural counties offer small business matching grants to encourage job creation in their communities.
Minority and Special Group Grants. State agencies often have grants for minority-owned, veteran-owned, or women-owned businesses. These can include training grants, marketing grants, or capital infusion grants specific to those groups.
COVID/Emergency Relief Funds. During and after the pandemic, states like California ran grant programs to help affected small businesses with reopening costs and adaptation (e.g. outdoor dining grants, microgrants for impacted firms).

Some of those programs have wound down, but it’s worth checking for any ongoing relief or recovery grant programs in your state.

Because programs differ so much, small business owners should check their state’s economic development or small business agency website. For example, the California Governor’s Office of Business and Economic Development (GO-Biz) maintains a list of current grant programs for businesses.

Similarly, many states’ Small Business Development Centers (SBDCs) publish lists of state-specific opportunities. The U.S. Chamber of Commerce notes that “each state offers unique grant opportunities tailored to specific industries, needs, and demographics”, so it pays to research your particular state.

Some examples of state/local grants include:

State Trade Expansion (STEP) Grants: Although funded federally (via SBA), STEP grants are administered by state governments for small exporters.

Eligible businesses in each state can receive reimbursement for export marketing costs (trade shows, marketing materials, etc.).
State Small Business Innovation Grants: A few states offer their own R&D grants. For instance, Texas and New York have occasionally funded SBIR-like programs to match federal awards or support technology commercialization.
Local Business Grants and Contests: Cities and counties often run grant contests for local entrepreneurs. For example, San Francisco’s Accessibility Grant helps small businesses remove ADA barriers (up to $10,000). Austin or Denver might have startup pitch competitions. Checking city or county small business websites can reveal such opportunities.

Overall, state/local grants are too numerous to list exhaustively, but resources like state SBDCs, chambers of commerce, and local economic development agencies are key starting points.

The SoFi guide aptly notes that in addition to federal grants, “state grants are available for businesses, too,” and lists each state’s programs. Use those state links or contact a local SBDC to find relevant state or municipal grants.

Private and Nonprofit Grant Sources

Beyond government, numerous corporations, nonprofits, and foundations run grant or prize programs for small businesses. These private grants are often structured as contests or award programs. Here are several notable examples (applicable to a general small business, not industry-specific):

Other Corporate/Nonprofit Grants – There are many niche grants (e.g. the Tory Burch Foundation grant for women entrepreneurs, Cartier Women’s Initiative, etc.) and small corporate grants. Details change yearly, but sites like Nav.com and LegalZoom often list current grant opportunities.

Amber Grants for Women – Managed by WomensNet, this program offers monthly $10,000 grants to women-owned businesses, plus $25,000 year-end grants for some winners.

Each month three winners get $10K, and among those winners, three are later awarded an extra $25K at year-end. The Amber Grant emphasizes simple applications (no long forms) and focuses on helping women entrepreneurs obtain funding without equity.

National Association for the Self-Employed (NASE) Growth Grants – NASE offers grants up to $4,000 to qualified members for business development expenses like marketing or equipment.

(Note: You must be an NASE member to apply.) These small grants can help with very specific growth needs. The NASE program is open to any industry of small business that joins the association.

Visa Everywhere Initiative – Visa runs an annual global contest (the VEI) open to fintech and payment-related startups. The top prize is $100,000, with smaller prizes also awarded.

Typically, the contest has special categories (e.g. women-owned, Black-owned, etc.) in each round, but any innovative startup using Visa’s rails can compete. Winning offers both funding and mentoring opportunities.

Mastercard & Fearless Fund “Fearless Strivers” Grants – Mastercard’s Fearless Strivers program awards four $20,000 grants (often targeted to Black women entrepreneurs) in each grant cycle.

It is a skill-based competition (applicants submit business pitches), emphasizing minority and women entrepreneurs.

Hello Alice Grants – The Hello Alice platform frequently administers grant programs for small businesses. For example, they have awarded $5,000 grants to entrepreneurs who meet program criteria. Hello Alice grants often come with community support and coaching.

U.S. Chamber of Commerce Dream Big Awards – The U.S. Chamber runs the Dream Big Awards contest for small businesses.

Winners receive prizes of up to $25,000 (with smaller prizes for runners-up). Applicants must show how their business was started and its community impact.

FedEx Small Business Grant Contest – [Note: This program concluded in 2024.] From 2012–2024, FedEx held an annual grant contest where small businesses could win prizes (a $50,000 grand prize and several $20,000 awards).

Although the contest is now retired, it exemplifies the type of corporate grant competition that exists. (During its run, FedEx awarded $30K to each of 10 winners and $20K to a veteran-owned business.)

Local Pitch Competitions – Many cities and states host pitch or business-plan competitions. These offer cash prizes (often granted as “grants”) to winners.

Awards vary widely – sometimes $500, sometimes $50,000 or more. For example, business incubators may hold annual pitch nights. Check local business accelerator programs or entrepreneurship meetups for such contests.

Below is a brief table of example private/nonprofit grants:

Grant/Contest	Sponsor/Source	Eligibility/Notes	Typical Award
Amber Grant (Women)	WomensNet (nonprofit)	Women-owned businesses	$10,000 each to monthly winners; three $25,000 annual awards
NASE Growth Grant	NASE (nonprofit membership org)	NASE members, any industry	Up to $4,000 per winner
Visa Everywhere Initiative	Visa (corporate)	Fintech/startups (global)	Top prize $100,000; other prizes $10K–$50K
Fearless Strivers Grant	Mastercard (with Fearless Fund)	Black women entrepreneurs (skill contest)	$20,000 to four businesses per year
Dream Big Awards	U.S. Chamber of Commerce	Open to for-profit small businesses	Grand prize $25,000
Hello Alice Grants	Hello Alice (online platform)	Various grant competitions (U.S. businesses)	$5,000 per winner
Local Pitch Prize	Various (city/business incubators)	Varies by contest	$500 to $50,000+

Many of these grants require a brief essay, video pitch, or business plan. Applicants should carefully follow instructions – for example, some contests emphasize storytelling and community impact.

As the Alabama SBDC notes, even though grants are called “free money,” winning requires a strong written proposal or pitch and a clear plan for how to use the funds.

How to Find and Apply for Small Business Grants

Finding Grants: Start with broad government resources and then niche programs. Some key places to search:

Grants.gov (Federal): The official database of federal grants. You can filter by category “Small Business” or by agency (e.g. SBA, Dept. of Commerce). This lists SBIR solicitations, EDA competitions, USDA grants, and many more. (Register on Grants.gov to apply to federal grants.)
State Government & SBDC Sites: State commerce/development websites and Small Business Development Centers often maintain lists of state and local funding programs.

For example, California’s Office of Small Business Advocate lists current grant programs, and New York’s Empire State Development outlines SSBCI-backed grants. The SoFi guide notes that each state has tailored grants, so check your state’s official pages.
Local Economic Development: County or city economic development departments may offer micro-grants or small business support programs. Local chambers of commerce and nonprofit development organizations also list opportunities.
Business Associations and Foundations: Industry associations, trade groups, and nonprofits (like women’s business groups, minority business groups, etc.) often publicize grant programs. For example, WomensNet (Amber Grant) and NASE advertise on their own sites.
Online Grant Finders: Websites like Nav.com and LegalZoom compile lists of current small business grants.

While not official, they can be a starting point to discover programs like FedEx, Visa, and others. (Always verify details on the official program site.)

Applying for Grants: The application process varies by grant, but generally involves these steps:

Do Your Research: Identify grants you qualify for by carefully reading the eligibility criteria. Note deadlines, required formats (essay, video, etc.), and funding amounts. Because grant guidelines differ, avoid one-size-fits-all applications.
Write a Strong Proposal or Application: Most grants require a written explanation of your business and how you will use the funds. Prepare a clear, concise business plan or project plan. Emphasize how the grant money will help achieve specific objectives.

As one business advisor notes, “to be successful in winning a grant, you must provide the funding agency with a well-written proposal that clearly states your objectives and plan and budget for your activities.”. Follow all instructions exactly, and tailor your application to each grant’s focus area.
Gather Documentation: Many grants (especially government ones) require documentation of your business status, financials, ownership, and possibly proof of community impact. Keep financial statements, tax documents, and demographic information ready.
Submit Before Deadlines: Government grants can have strict submission deadlines and processes (often online portal submissions).

Apply early if allowed, and double-check that all forms are complete. Some programs have rolling deadlines (e.g. SBIR/STTR have annual cycles), so note those calendars.
Plan for Reporting: If awarded, you will generally need to report on your progress. Establish a tracking system for the grant funds, documenting how you spend them and the outcomes achieved.

Many agencies require periodic financial and performance reports after you receive grant money. Being able to quickly show receipts or impact metrics can satisfy those requirements.

Eligibility Tips: To improve chances:

Match Grant Focus: Apply for grants whose goals match your business. For example, if you have an innovative tech product, SBIR is a fit. If you run a factory, manufacturing grants make sense.

A grant for economic redevelopment is best for projects creating jobs in a community. Do not guess – read the purpose of the grant carefully.
Check Specific Criteria: Many grants target specific groups – such as women, minorities, veterans, rural business, etc. If you qualify as one of these, highlight it.

For instance, minority business grants (MBDA, Fearless Strivers, WeBackBlackBusiness) require proof of minority ownership.
Prepare Financially: While grants themselves don’t require repayment, you may need to show some investment or matching funds, or that your business is already viable.

Having good credit and bank statements can support your application, especially for programs administered by financial institutions (like SSBCI programs).
Be Wary of Scams: Genuine federal grants are only listed on official sites (grants.gov, SBA.gov). If anyone promises guaranteed “free money” or charges you a fee to apply, it’s likely fraudulent.

The SBA warns that it only communicates from “@sba.gov” addresses and does not charge for grant help. Always verify grant announcements on reputable sites.

Finally, recognize that grant money is taxable. The IRS generally treats grant funds as business income, so consult an accountant once you receive a grant award.

Where to Search for Grants and Resources

Grants.gov: (https://www.grants.gov) The official federal grant portal. You can filter by “Topic Area” or “Agency” and find all currently open federal grant solicitations. It includes SBIR/STTR topics, EDA Notices of Funding Opportunity, USDA programs, etc..
SBA (Small Business Administration): Although SBA itself does not give startup grants, its Resource Partner Directory can connect you to SBDCs, SCORE, and local business centers that help with grant searches. SBA’s site also has updates on federal small business programs.
State SBDC and Local Business Centers: The SBA-funded SBDC network has offices in every state. Their websites often list local and state funding programs. For example, the Alabama SBDC page provides updates on national contests and tips.
Chamber of Commerce: Local and national chambers frequently update members on grant opportunities. The U.S. Chamber also publishes guides (like the one we have cited) that profile federal and major private grants.
Online Directories: Websites like the Foundation Directory (Candid) list grants from foundations and nonprofits (often for nonprofits, but occasionally open to businesses), and sites like GrantWatch categorize small business grants by state and topic.

Always keep an eye on grant application windows; some are annual, others open at unpredictable times. Make use of newsletters and alerts from government sites or business organizations.

Frequently Asked Questions

Q: What is the difference between a grant and a loan for a small business?

A: A grant is funding that typically does not need to be repaid (unless you violate its terms), whereas a loan must be repaid with interest.

Grants are usually more competitive and come with strict usage and reporting requirements. Loans are easier to qualify for (since lenders earn interest) but require repayment and often collateral or good credit.

Q: How do I know if I qualify for a grant?

A: Each grant has specific eligibility criteria. Read them carefully: they may require you to be in a certain industry, location, size, or demographic group.

For example, many grants target technology firms, rural businesses, or minority-owned enterprises. Only apply if your business clearly fits those requirements.

Q: Where can I search for small business grant opportunities?

A: Start with Grants.gov for federal opportunities. Check your state’s economic development website or SBDC for local programs (each state has unique grants). Also look at SBA partners (SBDCs, SCORE) and small business media sites (like the U.S. Chamber, Forbes, or Nav) for updated grant lists.

Q: Are small business grant awards taxable?

A: Yes. The IRS generally considers grant money as business income. Even though it’s not a loan, you will need to report it as part of your business revenue and pay taxes accordingly.

Q: Do I need to pay a fee to apply for a grant?

A: No. Legitimate grants, especially government grants, never charge application fees. The SBA warns that it only sends emails from “@sba.gov”. If anyone asks for money to help you apply for a grant, it is likely a scam. Use official channels to apply.

Q: Can I apply for multiple grants at once?

A: Yes. Small businesses often submit different grant applications simultaneously (e.g. one federal R&D grant, one local economic development grant, one private contest). Just be sure you can meet all application deadlines and requirements, and that grant terms don’t conflict. (Also track reporting obligations for any grant you win.)

Q: What should I include in a grant application?

A: Typically: a clear business or project description, objectives, implementation plan, budget for how the grant money will be used, and how you will measure outcomes. Tailor your application to highlight how your business meets the grant’s goals.

Include any required business documents (licenses, financials, etc.) as attachments. The U.S. Chamber advises creating a compelling, well-written proposal and being ready to report on the funds.

Q: Are there grants specifically for startups?

A: There are few grants exclusively for brand-new businesses. Most grants expect you to be at least operational and working on a project. However, some incubators and contests (especially those focused on innovation or tech) allow early-stage companies or even ideas.

Women’s and minority entrepreneurship grants sometimes fund early stages. Always check the fine print – many public grants require an established business entity.

Q: What if I win a grant? Do I have ongoing obligations?

A: Yes. Grants usually come with obligations. You may need to submit periodic reports detailing how you spent the money and what progress has been made on project goals. Keep detailed records (receipts, reports) and follow the grant timeline closely. Failure to comply could result in having to return funds.

Q: Where can I learn more about writing grant proposals?

A: The SBA and many nonprofits offer free counseling on grant writing. Consider contacting your local SBDC or SCORE office for advice. There are also many online resources and templates for grant proposals. The key is to align your proposal with the grantmaker’s mission and to show clear, measurable impact of the funds.

By leveraging these resources and understanding the rules, small business owners can tap into a variety of grant programs. While not easy, securing even a small grant can provide a crucial boost without debt – making the effort to apply worthwhile.

Conclusion

Small business grants can be a powerful source of funding, but they require diligence to obtain. Federal grants (through SBIR/STTR, USDA, EDA, MBDA, etc.) are available but often target research, exports, or community projects. State and local grants can vary by region and may focus on state priorities.

Additionally, many private companies and nonprofits run ongoing grant programs (for example, women’s grants like Amber, minority business grants, and corporate contests).

Key Takeaways:

Grants are free money in that they do not need to be repaid, but they come with strict conditions and reporting requirements.
The SBA cautions that the U.S. government generally does not give grants for ordinary business expansion. Expect to justify any grant funding with a clear business plan, budget, and alignment to the grant’s goals.
Apply only for grants that match your business profile. For example, a tech startup might pursue SBIR/STTR or NSF’s America’s Seed Fund (which can award up to $2 million), while a manufacturer might seek SBA manufacturing grants or state manufacturing incentives.
Private grants (like FedEx’s contest, Visa’s initiative, Amber) are often easier to qualify for than federal grants, but still competitive. They can be great opportunities for free funding and publicity.
Use reputable sources (Grants.gov, official state websites, known business organizations) to find programs. Beware of any entity charging fees or guaranteeing grants.
Prepare thoroughly: research each grant, write a strong proposal, and establish methods to track and report the use of funds.

By systematically searching available grant programs and crafting careful applications, a small business can increase its odds of securing grant funding in 2025.

Though not a substitute for revenue or loans, grants can subsidize innovation and growth in exactly the ways you plan — with no repayment required if you meet the terms.