Best Small Business Grants for Free Money

Updated on August 27, 2021
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Small business grants offer free money to start or grow a business—or due to the coronavirus outbreak, help it stay afloat. While some states have resources for small business owners and you can also apply for coronavirus business loans, COVID-19 small business grants are also available.

Beyond the following coronavirus small business grants, keep reading for a complete list of small business grants—from federal and state options to grants for women, minorities, and veterans—and information on how to apply for grants and the important differences between small business grants and loans.

Small Business Stimulus Grants

Targeted Economic Injury Disaster Loan Advance Grant

Certain small business owners applying for an Economic Injury Disaster Loan (EIDL) through the SBA are eligible for an emergency cash advance of up to $10,000. This advance can be forgiven by the SBA (effectively turned into a grant) if you spend it on maintaining payroll, paid leave, increased costs, mortgage or lease payments, or other financial obligations.

Targeted EIDL funds are available to businesses in low-income communities that can demonstrate a more than 30% reduction of revenue during an eight-week period since March 2, 2020. Your business must have previously received an EIDL Advance for less than $10,000 to be eligible, or previously applied for an EIDL Advance but did not receive one due to a lack of program funding. The original EIDL Advance program, authorized as part of the CARES Act, is no longer active.

No action is required to qualify for a Targeted EIDL grant. The SBA will reach out to eligible businesses. If you receive an email about an SBA grant, make sure it arrives from an address ending in to avoid a potential business loan scam.

Shuttered Venue Operators Grant

The SBA introduced this COVID-19 grant as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Shuttered Venue Operators Grants are available to individuals such as movie theater operators, talent representatives, and others who were affected by having their venue closed due to the pandemic.

Eligible applicants can receive a grant worth up to 45% of their gross earned revenue. The maximum grant amount is $10 million. To be eligible, applicants or venues must have been in operation as of February 29, 2020, and have not applied for or received a PPP loan on or after December 27, 2020.

As of August 2021, applications for Shuttered Venue Operators Grants are closed. The SBA intends to open the program for supplemental grants worth 50% of the original award amount, capped at a total of $10 million, but has not yet announced additional details. Visit the SBA website for updates on this timing.

State-Based COVID-19 Relief Grants

Many local COVID-19 grants and relief funds were created in 2020 to help businesses struggling due to the pandemic. Some of these programs, such as the Minnesota DEED Small Business Relief Grant Program and Denver Economic Development and Opportunity Relief Package, have exhausted their funding and are no longer issuing grants.

However, some states and cities have continued to offer relief this year. For example, California legislation passed in February 2021 will provide small business grants of up to $25,000. New York State is also offering grants of up to $50,000 through their COVID-19 Pandemic Small Business Recovery Grant Program. Monitor your state’s department of commerce website or grants portal, as well as organizations like your local chamber of commerce, to stay on top of free money opportunities as they arise.

Corporate COVID-19 Relief Grants

Similar to local government efforts, many well-known corporations such as Facebook and Yelp offered small business grants and relief at the beginning of the pandemic that are no longer available. Some companies continue to introduce new funding—Verizon committed $10 million to small business grants in February, for example—but application windows are often short for these grants. Organizations such as the Local Initiatives Support Corporation can help you stay on top of these opportunities.

Federal Business Grants for Small Business

Although there are plenty of federal business grants for small businesses, they are primarily open to companies in the science, technology, or health fields. If your business is involved in research and development or in scientific initiatives—including environmental and climate initiatives—then federal grant programs might be able to cover some of your expenses and help with your small business funding.

Here are the top federal business grants for small business:

Small Business Innovation Research Program

The SBIR program is designed for small businesses engaged in research and development that have commercial potential. The SBIR aims to stimulate technological innovation and scientific entrepreneurship. Eleven government agencies participate in the program, and each creates their own eligibility guidelines, research and development topics, and reviews applications. Grants generally start between $25,000 and $250,000, but if your business shows promise, then you can receive additional small business grants of more than $1 million.

Small Business Technology Transfer Program

The STTR has similar goals as the SBIR program but requires their small business applicants to collaborate with a research institution. Five federal agencies currently participate in this program, setting aside a bit of their budget to work with small businesses. As with the SBIR grants, these federal business grants start at $25,000 and then go up to more than $1 million.

Let’s take a closer look at the five main federal agencies that participate in the SBIR and STTR programs and their more specific grants.

National Science Foundation

First, the NSF accepts proposals in the areas of engineering, science, or medicine, though specific topics change from year to year. They even have a YouTube channel to help you get your application in order.


What’s cooler than collaborating with NASA? Getting paid to collaborate with NASA. Plenty of technology sectors are important to develop for NASA, but they’re especially interested in energy efficiency, alternative and renewable energy, or efficient ways of building spacecraft.

National Institutes of Health

The National Institutes of Health, a subset of the Department of Health and Human Services, offers grants for small businesses researching and developing commercially innovative biomedical technologies. Sound like you? Save some money while you’re saving lives.

Department of Energy

The Department of Energy’s Office of Science also participates in these two small business grants. Topics for these federal business grants for small businesses include environmental science, clean energy, and material science. Check out their program’s frequently asked questions page for more details.

Department of Defense

Whether your technology research and development is meant for the Army, Navy, Air Force, or DARPA’s advanced initiatives, the Department of Defense will help you fund and commercialize your products with a handful of grants for small business startups.

There are also a few governmental agencies that offer small business grants for the Small Business Innovation Research program only. The STTR mandates collaboration between a research institution and your small business, but the SBIR does not—which could be an advantage or a disadvantage, depending on what you’re looking for. Let’s take a look.

National Institute of Food and Agriculture

This branch of the Department of Agriculture supports research and development in the agricultural field specifically. Topics for grant funding for small businesses include forestry, food science and nutrition, aquacultural, biofuel products, animal protection, and more.

National Institute of Standards and Technology

A division of the Department of Commerce, NIST gives small business grants to companies developing technology under topics like cybersecurity, manufacturing, software, and trade. This being said, this agency also deals with energy, health care, and others—so you’re free to apply to some or all of these departments if you qualify for the SBIR.

Environmental Protection Agency

The EPA awards government grants for small businesses looking to advance green technology and sustainable scientific developments.

Department of Transportation

The Department of Transportation’s transportation systems center, Volpe, accepts solicitations for aid in developing technology regarding aviation, railroads, and highways, but you’ll want to make sure to check their updated topic listings before you apply.

Homeland Security

The Department of Homeland Security provides grants for small businesses that work in the areas of border and maritime security, chemical and biological defense, cybersecurity, explosives, or first responder group technology.

Department of Education

The Department of Education’s SBIR grant topics are listed under the National Center for Education Research branch, and range from pre-reading and pre-writing technology developments to research that deals with STEM skills, language learning, and behavioral learning patterns.

National Oceanic and Atmospheric Administration (NOAA)

The Technology Partnerships Office of NOAA offers small business grants for developments and research in coastline communities and economies, healthy ocean monitoring, climate adaptation and mitigation, and much more.

Beyond SBIR and STTR—the two major federal research and development grant programs—some federal government agencies also offer specific government grants for small businesses. We trawled through a few databases of federal small business grants—of which the Catalog of Federal Domestic Assistance is the authoritative source—and pulled the most noteworthy options. Nevertheless, you’ll want to make sure to search for yourself, especially if your small business is involved in agriculture, public health, or sustainable development. These offerings update regularly.

Rural Energy for America Program

This grant program, run by the Department of Agriculture, centers on small businesses in eligible rural areas looking to purchase, construct, or install renewable energy systems or energy efficiency improvement technologies. You can partner one of these federal business grants with a USDA loan guaranty as well, and together they’ll back up to 75% of your eligible project costs.

Value-Added Producer Grant

If you’re an agricultural producer, the VAPG program could help you with working capital expenses, ranging from processing to marketing and advertising, to inventory and salary expenses.

Distance Learning and Telemedicine Grant

The Department of Agriculture offers this grant program for small businesses and agricultural producers that are modernizing education and health in rural communities. Specifically, these business grants are an option if your company provides education or health services through telecommunications. Awards range from $50,000 to $1,000,000.

3D Elevation Grant

The Department of the Interior is offering a government grant for small businesses that can creatively leverage lidar and map data to come up with natural 3D imaging of the nation’s topographical boundaries. This is a great business grant for design and technology firms.

State Government Grants for Small Business

State-level small business grants are generally geared toward that particular state’s social or economic concerns. They’re meant to work in tandem with federal or other state grants, so you’ll usually get less funding. That said, they’re much more accessible due to lower competition. Also, many are matching grants: Instead of just providing the funds for you to use for a certain purpose, some will require that you match the money they give as well.

You can search for business grants in your own state and industry by looking at your state’s department of commerce website or grants portal. Below, we list some popular state grant programs and resources.

Also, an important note: While we’re listing state-specific government grants for small businesses, many of these run across multiple states, so don’t give up if the grant looks right but your states don’t match.

Arizona Commerce Authority

The Arizona Commerce Authority is a great resource for small business owners in Arizona. You can check back throughout the year for new competitions and grant options. The Arizona Step Grant is a popular program, which provides grant funding for small businesses that are exporting products or expanding into international markets.

Arkansas Infrastructure Grant Program

The Arkansas Economic Development Commission offers several grants, rebates, and incentives to businesses that create jobs or expand in Arkansas. For example, the Infrastructure Grant is for businesses that create full-time jobs in Arkansas.

Colorado Export Development Grant

Colorado regularly ranks as one of the best states for startups and entrepreneurship, and the state government is helping to make sure that innovation continues in this state. Colorado offers government grants for many types of small and medium-sized businesses, especially businesses that are interested in international development or that are involved in advanced industries like robotics.

Idaho State Trade Expansion Program (STEP) Grant

Many states actually have a STEP program, Idaho included. However, they each have individual application processes and qualification criteria, so you’ll want to make sure you double-check what you need to do to apply. In Idaho, these government grants are primarily for small businesses that want to enter international markets.

Iowa Business Development Grant Recycling

Iowa provides a wide range of business development grants. The state’s focus is on businesses that create manufacturing jobs and enhance Iowa’s other industries. There are also grants for retail businesses that are rehabilitating downtown buildings. You can see the latest opportunities on Iowa’s grants portal.

Kansas Job Creation Fund

The Kansas Job Creation Fund gives grants to businesses looking for help establishing themselves in Kansas. The fund typically disburses the grant money to recipients over five years as their company reaches certain investment and employment benchmarks.

Louisiana Community Development Block Grant

The Office of Community Development aims to improve the living environments and economic opportunities for Louisiana’s low-income residents. Although small businesses can’t apply directly, you can contact the state or local government branches that are most relevant to your business’s function and see if you can receive funding to do community work. There are also disaster recovery grants that are issued to businesses affected by hurricanes.

Maryland Child Care Quality Incentive Grant Program

The Maryland Division of Early Childhood Development plans to reopen its CCQIG program for local child care facilities in the 2022 fiscal year. This small business grant is awarded quarterly.

ExportMD Program

For those especially enterprising small businesses: If you’re looking to market internationally, then this Maryland program could help you cut down on costs.

Maryland Economic Development Assistance Authority and Fund

Although we happen to be listing a lot of Maryland initiatives, many states carry the same or similar programs in their own boundaries as well. In this case, the MEDAAF is an unusually broad small business grant and loan opportunity for Maryland small business owners. Priority funding areas and industries vary with each grant cycle, so you’ll want to keep an eye out for updates.

Minnesota Dairy Business Planning Grant

On the other side of the spectrum, this program covers a narrow sliver of Minnesota’s small businesses—but that means low competition. If you manage a dairy farm or are developing environmental technologies related to dairy farming, look into the DBPG.

Minnesota REETAIN

REETAIN, or Retaining Early Educators Through Attaining Incentives Now, offers small grants to child care professionals in Minnesota. If you’re a child care professional in Minnesota, this could be the extra cash you need to help defray costs.

Minnesota Crop Research Grant Program

Again, most state’s agriculture departments have small business grants that are some variation on the CRGP. If your business researches agricultural product quality, quantity, or value, this government grant could work well for you.

Minnesota Innovation Voucher Award Program

If your business needs cash to purchase technical assistance or to commercialize your products, you can score a substantial amount of capital with this grant. This is a matching grant for small business startups, so you’ll need to put up half of the cash.

Minnesota Job Creation Fund

The Minnesota Job Creation Fund is for new and expanding businesses that meet targets for job creation and capital investment. Eligible companies can receive up to $1 million for creating or retaining high-salaried jobs and for rehabilitating facilities.

Nebraska Child Care Grant

For child care homes and centers, this program offers a number of smaller business grants for you to apply to, including startup and expansion, quality improvement, and emergency mini grants.

North Carolina Recycling Business Development Grants

The Recycling Business Assistance Center aims to encourage sustainability and reduce waste with this yearly grant program.

North Carolina IDEA

Looking for grants for your small business startup? The NC IDEA gives out business grants of up to $50,000 and has sponsored nearly 100 high-tech companies with growth potential. This is actually a private foundation, but their grants are open only to North Carolina businesses. There are different grants for different types of companies—such as small business grants for women-owned businesses or seed-stage businesses.

Tennessee Department of Economic and Community Development

With small business grants for companies that are expanding, offering training initiatives, or improving public infrastructure, these Tennessee grants shouldn’t be skipped if you’re located in this state.

Texas Young Farmer Grant

For residents between 18 and 46 years of age, this small business grant funds projects that support Texas’ agricultural production and community.

Local Small Business Grants

In addition to statewide government grants, cities, towns, and nonprofits finance their own small business grant programs. Continuing the trend, these usually carry smaller payloads but less competition. For local small business grants, you’ve got a substantial upper hand if you serve your community in a tangible and demonstrable way.

Plus, is your small business aimed at promoting health, environmental consciousness, or similar initiatives? If so, you’ll be looking at even more local grants to apply for—and get funding for your eco-friendly business. Because local small business grants are so geographically specific, we’ve pulled just a few to show you what kinds of opportunities may exist in your nearby city or town. Again, make sure to look for similar programs in your own locality.

Cleveland Department of Economic Development

Many cities—including Cleveland, which we’ll use as an example for this section—have a number of small business grants and initiatives to foster entrepreneurship.

Job Creation Tax Abatements

Your small business might be in an Enterprise Zone (as Ohio terms it), or a similar type of area, and accordingly be offered tax incentives for projects or operations that create jobs. These aren’t technically small business grants, but they put additional money in your business’s pocket that you can use to grow.

Tech Delta Grant Program

Small businesses in the tech space that create five or more jobs in the city of Cleveland can apply for this grant that awards funding on a square-foot basis—$5 per square foot, up to $50,000 to expand operations or lower rent costs.

Ben Franklin Technology Partners

Ben Franklin Technology Partners has been investing in startups in central and northern Pennsylvania for more than 30 years. Tech startups can potentially receive up to four yearly infusions of cash totaling around $500,000. Small manufacturers may be eligible for a one-time investment of up to $250,000. To learn more about eligibility, check out their website.

Chicago Small Business Improvement Fund

The SBIF supports small businesses repairing or remodeling their location, whether by updating windows and floors, replacing signage, or purchasing nearby property to expand into. Note that you’d receive this matching grant after completing and paying for your remodeling, so be cautious—plenty of other businesses are likely competing for small business grants like these.

Miami Mom and Pop Small Business Grant

If you’re in Miami and have been in business for at least a year, make sure to apply to this program meant to “bridge the gap between local government and small owned and operated businesses.”

New York City Fashion Manufacturing Initiative

The FMI offers business grants to New York City fashion manufacturers who need to purchase equipment, make upgrades, or train their employees.

Centers for Advanced Technology Grants in the Buffalo Niagara Region

These small business grants are given out in the Buffalo Niagara region of New York to businesses that partner with a college or university on a research and development project that helps commercialize a technology and bring it closer to market. There are multiple grants available across the state.

Land, Health, Community Grant

The Land, Health, Community grant (formerly the Lumpkin Family Fund) is a private foundation, but they offer grants for small business startups in East Central Illinois. Grants are available to organizations that focus on food service, the local agriculture economy, and sustainable practices.

Orlando Downtown Commercial and Residential Building Improvement Program

This Orlando program provides business grants between $15,000 and $120,000 for organizations that make improvements to buildings within the downtown Orlando Community Redevelopment Agency (CRA) boundaries. This program encourages the reuse of vacant or underutilized properties and hopes to improve the appearance and support the long-term viability of downtown Orlando.

Southeast Michigan Resilience Fund

Aimed at investing in stormwater infrastructure solutions and restoring the region’s unique natural areas, the Southeast Michigan Resilience Fund grant program gives out small business grants ranging from $50,000 to $300,000 for businesses working on projects that support either of these goals.

New Mexico True CoOp Program

Local townships and cities, as well as states, give tourism grants to businesses that promote travel and visitors to their area. This particular program works with small businesses to help them promote what’s uniquely New Mexican about their event or location.

Salt Lake City River District Gardens Facade Improvement Grant

Part of a local beautification program, this grant applies only to businesses within a certain district of the city. Again, though not a lot of money, small business grants like these are not super competitive and require little effort to apply for.

Corporate Small Business Grants

Government grants for small businesses are great, but the requirements are often hyper-specific, or the funding amounts aren’t that large. Big corporations, on the other hand, will often provide small business grants to contest winners. For you, it’s money to grow your business. For them, it’s a PR win, netting loyal corporate customers and a lot of goodwill.

The difference here is that many corporate-sponsored small business grants involve pitch competitions or something similar. Not all do, of course, but you’ll want to be aware that applying to a corporate grant might involve more work. With that, though, comes the potential for publicity—and for runner-up prizes if you don’t win first prize.

Intuit National Association for the Self-Employed (NASE) Grant

Intuit, the tax preparation software company, gives small businesses a $4,000 grant in partnership with NASE. This is designed to help small businesses and freelancers take their business to the next level. Intuit usually gives out these small business grants annually.

FedEx Small Business Grant

FedEx annually awards grants totaling over $230,000 to 12 small businesses nationwide with its small business grant contest. You can check out the past FedEx small business grant winners—and hear their words of wisdom and warning—on the FedEx site.

Visa Everywhere Initiative

Visa’s Everywhere Initiative offers grant funding for small business startups with innovative fixes—awarding $50,000 to the final three winners every year.

Wells Fargo Community Investment

Offering business grants in nearly every state, the Wells Fargo Community Investment program focuses mainly on nonprofits—but small businesses with the right criteria can qualify, too.

Kuvio Creative

Kuvio Creative is a full-service web design and development company that gives back to entrepreneurs who are making a difference by providing them with small business grants and free services. Applications for the Kuvio Impact Grant open three times per year. Grant recipients will receive up to 100 hours of free services, such as web design and marketing, depending on the scope of the project. This program is reserved for nonprofits, women-owned companies, minority-owned businesses, and veteran-owned organizations.

Small Business Grants for Startups

Many small business grants are open only to businesses that have been operating for a few years and have an established product or service. However, it’s often the newest businesses that need the most financial assistance and traditional loans to start a business can be hard to find. Therefore, you might check out these grants for small business startups.

4.0 Schools Fellowships

Fellowships from 4.0 Schools are designed to help business owners who have an idea to improve education in the United States. Your business idea could be a school, technology tool, retail product, or service. Business owners who are just testing the waters on their idea can get mini-grants of $600, and businesses that are further along are eligible for $10,000. The application cycle closes every September.

Jack Daniel’s Pitch Distilled

Jack Daniels hosts an annual pitch competition with the goal of inspiring entrepreneurs to surface the next big idea. Small business startups can apply and if accepted, they’ll pitch their ideas at the Pitch Distilled event to a group of business owners. The winner of this pitch contest will win a $5,000 prize, plus advice and guidance from the panel of judges to help make their idea a reality.

Additional Small Business Grants

Beyond the grants we’ve listed above, there are additional grant opportunities for specific groups of business owners. As these communities typically have a more difficult time securing funding, some organizations offer grants specifically for them. These include:

What Is a Business Grant?

A business grant is a form of funding that doesn’t need to be repaid. In other words, grants are essentially free money for your business. Grants, as you can see from the above list, can come from various places, including the federal or state government, large corporations, smaller nonprofits, private individuals, and more.

However, as you likely also gathered from our list of small business grants, there are typically several criteria that must be met to be eligible for a specific business grant. Grants are also incredibly competitive—after all, who wouldn’t want free money? The uses of a business grant will vary depending on the specific grant, but may include helping you grow your business, retain or create jobs, or develop a new product or idea.

How to Apply for a Business Grant

Each grant you apply for will have its own requirements and application process. However, keep these things in mind when applying for business grants.

  • Do your research. As this list demonstrates, there are many business grants available and more are added all the time. Since grants are so competitive, you may find the most success by finding smaller, more localized options. Looking into your state resources, as well as any professional and industry groups you belong to, can help you uncover more options that your business is eligible for. However, make sure these are legitimate grants and be wary of scams.
  • Make sure you meet the requirements. Most business grants have a laundry list of requirements that must be met in order for a business to be eligible. Make sure your business meets all of these requirements before applying—otherwise, you’ll be wasting your own time and resources.
  • Update your business plan. Most business grants will want to see a business plan to ensure you have a well-thought-out strategy for your business. If you haven’t updated your own plan since you first launched your business, it’s worth taking another pass to make sure everything is up to date and your financial data is current. This also gives you an opportunity to detail how your business meets the grant requirements.
  • Submit your application on time. This is a simple, but important one. Note the grant deadlines ahead of time to ensure your application is complete and submitted through the appropriate channel by the deadline. With so many businesses vying for limited funds, you don’t want to take yourself out of the running over such an easily avoidable slip.
  • Follow up. Just as you might when you apply for a job, it’s a good idea to follow up about your grant application to ensure it was received and to let the reviewers know you’re able to provide more information if needed. Most grants will provide information around when a winner will be announced, but if this information is missing, it’s also worth reaching out to get a better idea of when you should hear.

Business Grants vs. Business Loans

Small business grants have one major advantage over business loans: You don’t have to pay back a grant. A loan, on the other hand, has to be paid back with interest, which can be tough on new businesses and businesses with cash flow struggles. However, qualifying for a small business grant is also tough, so you may need to explore more traditional small business financing options that can work for you.

Two business loan options to consider if you can’t qualify for a grant funding for your small business are microloans and SBA loans.

Microloans are loans under $50,000, and usually have low eligibility requirements and reasonable interest rates. Many of the same organizations that provide grants, such as nonprofits and government organizations, also provide microloans. So, if you don’t qualify for a small business grant, we suggest asking the organization if they provide loans.

SBA loans are another alternative if you’re unable to qualify for a grant. The federal government guarantees SBA loans and works with banks to get these loans in the hands of small business owners. Because of this, SBA loans have low interest rates, long repayment terms, and larger capital amounts. You can approach your local bank and see if they provide SBA loans, or you can apply for an SBA loan through Fundera.

The Bottom Line

As you can see from this extensive list, there are a variety of business grants available out there—and the government actually provides a significant amount of funding for small business grants. However, applying for a small business grant can be time-consuming and may not always result in funding for your business.

If you can qualify for a grant, there’s no doubt that the money will help you along your business’s journey, whether you’re a startup or established business. On the other hand, if a small business grant doesn’t work out for you, don’t let that hold you back. As we’ve mentioned, there are a variety of other financing options that can work within your budget—in fact, the majority of businesses launch and grow with traditional financing.

Meredith Wood
GM, New Markets at NerdWallet

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a GM at NerdWallet.

Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.

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