Small Business Grants: How They Work, Who Qualifies, & Where To Look

Most small business funding options involve taking on debt. But loans and credit cards aren’t the only way to finance a business.

Small business grants provide funding without repayment, so business owners can pursue growth opportunities without adding debt.

What Are Small Business Grants?

A small business grant is funding awarded by a government agency or private organization that does not need to be repaid. However, grants aren’t free money in the traditional sense.

Most grants come with specific rules about how funds can be used, and the application process is often competitive and time-consuming. Businesses may need to submit detailed proposals, budgets, and reports to qualify and remain compliant.

While grants require effort to secure, they offer a major advantage over loans: they don’t create debt or impact your credit.

Small Business Grant Pros & Cons

Because grants are often awarded based on a business’s potential public or community impact, receiving one can add credibility to your organization. That credibility may also help strengthen future grant applications.

At the same time, it’s important to set realistic expectations. Most grant applications are denied, and the process can be time-consuming and highly specific. Grant funds are typically restricted to certain uses, and recipients are expected to follow the terms outlined in the award or application.

While grants come with limitations, they remain one of the few funding options that don’t create debt, making them worth exploring for businesses that meet the criteria and have the time to apply.

How To Find Business Grants

Business grants are offered at the federal, state, and local levels, as well as by private organizations. Start by searching government grant databases and reputable private grant directories.

When researching opportunities, focus on grants that align closely with your business type, mission, or ownership profile. Many grants are designed to support specific industries, community goals, or underrepresented groups, such as women-owned or veteran-owned businesses.

Do These 5 Things Before Applying For A Grant

Before starting a grant application, make sure you’re prepared:

1. Define your funding need: Be clear about how much you need and exactly what the grant would support.
2. Create a solid business plan: Many grantors want to see clear goals, financials, and impact.
3. Gather key records: Assemble financial statements and business records from the past few years.
4. Get expert feedback: Review your plan with mentors, advisors, or organizations like SCORE.
5. Consider professional help: If your budget allows, a grant writer can help strengthen your application.

Grant Resources For Small Businesses

Use these resources to find the right grant opportunities for your small business.

Grants.gov

Grants.gov is the central database for federal grant opportunities. It allows you to search grants offered by all federal agencies in one place.

That said, most federal grants are awarded to nonprofits, research institutions, or government entities, not for-profit small businesses. Still, it’s a useful resource for understanding what’s available and identifying any programs your business may qualify for.

State & Local Governments

State and local grant programs are often more relevant to small businesses than federal grants. These opportunities may better align with your location, industry, or community impact.

Start with your city, county, or state economic development offices, as well as your local chamber of commerce. Availability varies by location, and many programs accept applications only during limited windows, so it’s worth checking regularly.

National Association For The Self-Employed

The National Association for the Self-Employed (NASE) offers Growth Grants of up to $4,000 to small business owners for specific business needs, such as hiring or expansion.

To apply, you must be a NASE member and submit details on how the funds will be used and how they support your business plan. In addition to grant opportunities, NASE membership includes educational resources and business support benefits.

USDA Rural Business Enterprise Grant Program

The USDA Rural Business Enterprise Grant (RBEG) program provides funding to nonprofits, public entities, and tribes that support rural business development. While for-profit small businesses do not receive RBEG funds directly, they may benefit from programs or services funded through these grants.

RBEG-supported initiatives often include training, technical assistance, business incubators, and revolving loan funds for businesses located in rural areas — that is, areas outside cities with populations of 50,000 or more.

Rural business owners can learn more by contacting their local USDA Rural Development state office to see what programs are available in their area.

Amber Grant Program

The Amber Grant Program, run by WomensNet, awards $10,000 each month to a woman-owned business. At the end of the year, one monthly recipient also receives an additional grant.

The program is open to for-profit, women-owned businesses in the US and Canada. Applications are accepted year-round, and nonprofits are not eligible.

Unlike many grant programs, the Amber Grant application is relatively simple and focuses on the applicant’s story, goals, and passion rather than formal or technical language.

Visa Everywhere Initiative

The Visa Everywhere Initiative (VEI) is a global startup competition that awards funding to companies building products aligned with Visa’s payments and fintech ecosystem. Eligible businesses typically have a product in market, early customer traction, and some level of external funding.

Applications are usually accepted early in the year, with regional and global competitions held throughout the year. Award amounts vary by region and competition.

Don’t Qualify? The Best Alternatives To Small Business Grants

Small business grants are competitive, and most applicants don’t receive funding. If a grant isn’t an option, there are still practical ways to finance your business.

Two common alternatives include personal loans for business use and business lines of credit, both of which can provide flexible funding for startup or growth expenses.