Free Startup Money: Where To Get A Grant To Start A Business

Free money to start a small business sounds too good to be true, but it’s possible to score free funding with a small business grant. Startup grants do come at a price: finding the right grant takes time, the application process can be lengthy, and competition is fierce.

Don’t let this deter you, if you are trying to start a business with little to no money.

As long as you set realistic expectations, we encourage you to apply for grants you’re qualified to receive. This guide can help you identify the best startup grants and tips for applying.

What Type Of Startups Are Qualified For Grants?

Not all startups are qualified for business grants. Organizations that run grant programs want to invest in businesses that truly deserve funding and will put the grant money to good use. This includes:

• Businesses in specific industries
• Businesses that demonstrate a strong potential for growth
• Businesses that have a positive impact on the community or society
• Businesses that belong to marginalized groups
• Business owners with an economic disadvantage

If none of these categories really describes your startup, you may need a startup loan or other financing to fund your business.

Startup Grants By Business Type

Grants usually have a narrower scope than loans, meaning that each grant is usually for a specific type of business or purpose. This can refer to anything from specific industries to localities, the demographics of the business owner, or to a specific problem the grant is trying to address.

Let’s take a look at some of the more common categories.

Startup Grants For Innovators

Many startup business grants are for innovators and businesses that create novel, potentially disruptive products. These grants are generally for entrepreneurs in technology, medicine, science, agriculture, education, and research and development.

If this sounds like your business, get started with these options:

• Grants.gov: This is useful site for finding any type of grant. However, the majority are for businesses and nonprofits in science, medicine, and research and development. Search for grants on grants.gov or check your eligibility to apply for a grant from the federal government.
• Small Business Innovation Research (SBIR): This SBA-powered seed fund program awards grants of up to $150K in Phase I of funding. Depending on the results achieved after six months, recipients may receive up to $1 million and commercialization of the product that was developed.
• The US Economic Development Administration (EDA): The US Economic Development Administration focuses on sustainable job growth through regional investment and strategy. The bureau offers a number of grants for businesses, with some aimed at research and development or startups in economically distressed areas.

Startup Grants For Green Businesses

There are some public and private grants for green businesses, including startups. Generally, these grants cover the cost of installing sustainable infrastructure and/or energy systems. Some examples include:

• Rural Energy For America Program: As part of the USDA (US Department of Agriculture), this program awards renewable energy and energy efficiency grants. Grants are awarded to agricultural producers and rural small businesses for renewable energy systems or energy efficiency improvements.
• Database Of State Incentives For Renewables & Efficiency (DSIRE): Operated by NC Clean Energy Technology Center and funded by the US Department of Energy, DSIRE keeps an active database of green energy incentives across the country.

Startup Grants For Rural Businesses

Various grants aim to stimulate the economy in rural and economically distressed areas. These grants serve to attract new businesses to struggling regions. Grants include:

• Rural Business Development: This USDA grant is specifically for nonprofit and public entities. From the same agency, rural farmers/agricultural producers might be eligible for the Value Added Producer grant. For-profit businesses that provide education or health care to rural areas through telecommunications might be eligible for the Distance Learning and Telemedicine grant.
• US Economic Development Assistance Grants: The EDA supports development in economically distressed areas of the United States by fostering job creation and attracting private investment. Specifically, under the Economic Development Assistance program’s (EDAP) Notice of Funding Availability (NOFA), EDA will make construction, non-construction, and revolving loan fund investments under the Public Works and Economic Adjustment Assistance (EAA) Programs.

Startup Grants For Women-Owned Businesses

There are a number of women-owned business grants available. Additionally, some grant money goes to businesses that create solutions that benefit women and families. If your startup is woman-owned, you may qualify for grants such as:

• Amber Grants
• Cartier Women’s Initiative
• Tory Burch’s Foundation Fellows Program
• Women Founders Network Fast Pitch Competition
• IFundWomen

Startup Grants For Nonprofit Organizations

Nonprofit startups that have 501(c)(3) status with the IRS are eligible for government and private grant money. Nonprofit startup grants include:

• Grants.gov
• Candid
• Grant Gopher
• GrantWatch
• Walmart Spark Good Local Grants

Startup Grants For Veteran-Owned Businesses

Veteran business grant money includes retraining grants for veterans returning to civilian life and grants to nonprofits providing services to veterans. Some good places to start looking for grants for veteran-owned businesses include:

• National Association For The Self-Employed Growth Grants
• FedEx Small Business Grant Program
• VetFran

Startup Grants For Minority-Owned Businesses

The more active categories of grants are those aimed at businesses that are at least 51% owned by an individual classified as a minority.

Some potential grants for minority-owned businesses include:

• Dare To Dream Grant Program
• Native American Business Development Institute
• Office Of Minority Health Grant Programs
• Merchant Maverick Opportunity Grants

Startup Grants For Businesses In Specific Industries

Whatever your specific industry, you may be able to find a grant program dedicated to helping businesses in your sector excel. Usually, these highly-targeted grants are offered by industry organizations or private companies. Some examples include:

• Halstead Grants (for jewelry designers)
• eBay Up & Running Grants (for eBay sellers)
• NASE Growth Grants (for self-employed individuals)
• Grant For The Web (for monetized websites)
• Visa Anywhere Initiative (for IT startups)

At the start of your business grant search, make sure you spend plenty of time researching to find out if there are any grants available for your specific industry/business type.

General Startup Grants For Most Businesses

There are general small business grants available to any kind of business, but they are very competitive, so you will need an impressive story to wow the judges.

An impressive track record is a particular challenge for a startup business, which is usually defined as a business that’s been around for less than six months. But if your business has achieved a lot in its short operating time or you have an amazing idea, it’s worth applying to these small business grant contests.

A few grant programs include:

• FedEx Small Business Grant Contest: Any type of small business may apply for the FedEx business grant. A top award of $50,000 is available, as well as smaller cash prizes and FedEx services.
• Hello Alice: Startup business platform Hello Alice is currently offering $10,000 small business grants and mentorship sessions.

You may also be able to find general startup business grants open to businesses in your town, city, county, or state.

How To Get A Startup Business Grant: Tips For Applying

Getting a grant means competing to stand out from the crowd of other applicants. While every grant is slightly different in terms of qualifications and expectations, here are some general tips for applying for grants.

Best Alternatives To Startup Grants

Unless your business or startup is highly innovative and provides a demonstrable benefit to your community or the world at large, you are probably not grant-recipient material.

Even if you are eligible for some grant money and make it through the lengthy proposal process, you may only land a few hundred to a few thousand dollars.

Furthermore, startup business grants are incredibly hard to come by, as grantees will generally want to see what kind of results you’ve achieved on other projects carried out by your organization. Don’t fall for government grant scams that will have you believe there are piles of free grant money out there for the taking — this is not the case at all.

Rather than hoping to be among the fortunate few granted free money, you might want to look into grant alternatives for your business.

Alternatives for new business grants include crowdfunding, online loans, equipment financing. Consider these options if you’re ready to get your startup business off the ground. Good luck!