The Truth About Small Business Grants
Grants are money you don't repay, which is why they are among the most searched funding topics. They are also scarce and competitive. The U.S. Small Business Administration states that it does not provide grants for starting or expanding a business; its grants mainly go to nonprofits, educational organizations, and resource partners, plus specific programs for research, exporting, and community development.
The FTC warns that government agencies don't contact people out of the blue about grants, and that anyone asking for an upfront fee or payment by gift card, wire transfer, or cryptocurrency is running a scam. Real federal grant listings are free on Grants.gov.
Where Real Small Business Grants Come From
| Source | What it funds | Where to look |
|---|---|---|
| Federal research grants (SBIR/STTR) | Research and development by small businesses with technical innovations | SBIR.gov and agency announcements |
| Federal grant listings | Specific programs, mostly for nonprofits, governments, and research | Grants.gov |
| State and local programs | Economic development, downtown revitalization, disaster recovery, specific industries | Your state and city economic development agencies |
| Private and corporate grants | Competitions and programs, often for specific groups such as women- or minority-owned businesses | Company programs and foundations; verify each one |
Grants vs. Loans: Which Should You Pursue?
| Grants | Loans and funding | |
|---|---|---|
| Repayment | None | Yes, with interest or fees |
| Availability | Limited and competitive | Widely available to qualified businesses |
| Speed | Usually months, with fixed deadlines | Days to weeks for many programs |
| Use of funds | Restricted to the grant's purpose | Usually flexible within business purposes |
| Best for | Research, specific projects, eligible groups | Working capital, equipment, growth, and gaps |
Most owners do both: apply for grants that genuinely fit while using financing for needs that can't wait. Start with our funding programs or read about women-owned, minority-owned, and veteran-owned business funding.
How to Find and Apply for Grants
Define the project
Grants fund specific purposes. Write down exactly what the money will do and what result it will produce.
Search legitimate sources
Use Grants.gov, SBIR.gov, and your state's economic development agency. Your local Small Business Development Center can help for free.
Check eligibility closely
Most grants have strict criteria on business type, location, ownership, or use of funds.
Prepare a strong application
Expect a narrative, budget, financial statements, and sometimes matching funds.
Never pay to apply
Legitimate grant listings are free. Walk away from anyone charging to 'guarantee' a grant.
Need funding while you wait on grants?
One 60-second form, soft check only. See which financing options fit your business today.
Frequently Asked Questions
Does the SBA give grants to start a business?
No. The SBA states that it does not provide grants for starting or expanding a business. Its grants go mainly to nonprofits, resource partners, and specific research, export, and community programs.
Where can I find legitimate small business grants?
Grants.gov for federal programs, SBIR.gov for research and development funding, your state and local economic development agencies, and verified private or corporate grant programs.
Are free government grant offers real?
Unsolicited offers of free government grant money are scams, according to the FTC. Agencies don't contact people out of the blue, and real grants never require upfront fees.
Are there grants for women- or minority-owned businesses?
Some private, corporate, state, and local programs target specific groups. Verify each program directly, and consider SBA-backed loans, CDFIs, and MBDA resources too.
Should I apply for a grant or a loan?
Often both: pursue grants that genuinely fit a specific project, and use financing for needs that can't wait months for a grant decision.