Contrary to popular belief, grants aren’t just for non-profits. Learn about some of the private and public grant programs for small businesses.
When you’re an entrepreneur, raising enough money to survive and grow can be extremely challenging. Grants are a funding opportunity that founders of small, for-profit businesses can use to supplement other funding sources, such as business loans and equity investments.
Although grants are normally associated with non-profit organizations, it’s possible to find public and private grants for an early-stage, for-profit company. Public grants come from federal, state, or municipal governments. Private grants are from corporations or private foundations.
You typically need to have an established, operating business to receive a grant. In your application, you’ll clearly describe what traction you’ve achieved so far and how you’ll use the funds to grow. To maximize your chance of success, make sure that you:
- Match the grant’s eligibility criteria
- Prepare everything you need well before the deadline
- Make sure you include everything the organization asks for
- Have someone proofread your application
- Double-check everything before applying
- Keep your materials and important dates organized, especially if you’re applying for multiple grants
Pros of grants
Grants are typically non-dilutive and don’t have to be repaid, so you’re not giving up any equity or incurring any debt. Grants do have terms and conditions for application, eligibility, and acceptance.
Cons of grants
Grants are a specialized field. It can be hard to find a grant that you’re eligible for, and time-consuming to apply for one. Additionally, you’ll often have to wait months before learning if you’ve received the grant. Grants aren’t a short-term funding option. But raising funds from angel investors and other sources can take a while, too.
How can I find a grant?
Look for grant sources in your specific industry, whether that’s healthcare, natural sciences, education, food, or something else. Professional associations may provide grants. If you’re an undergraduate or graduate student who founded or co-founded an early-stage company, you can often find grant sources and assistance through your university and academic department. Some corporations provide grants to small businesses. And check for federal, state, and local government grants, as well.
Make sure the grant isn’t exclusively for non-profit organizations, researchers, students, activist groups, or anything other than small, for-profit businesses—unless, of course, you fall under one of those categories. When you find a grant that you’re eligible for, read the terms and conditions for eligibility closely.
To help get you started, here are some public and private grants that are open to early-stage, for-profit companies.
A number of federal agencies offer grant funding for small businesses, mainly through a variety of SBIR-related programs that we cover below.
Grants.gov is a site where you can learn about federal grants and apply for them. They also have a learning center where you can read educational content and watch videos about federal grants. You can search grants by eligibility (such as small businesses) and category (such as environment, health, and food).
Federal SBIR grants
The Small Business Innovation Development Act of 1982 established the Small Business Innovation Research (SBIR) program. This program is also known as America’s Seed Fund. SBIR is a highly competitive, awards-based program that encourages US-based small businesses to engage in federal R&D with the potential for commercialization.
Eleven federal agencies participate in SBIR to fund small, for-profit businesses. You can check the overview of SBIR programs for each participating federal agency, and learn how the SBIR program has helped R&D-focused entrepreneurs.
Each year, federal agencies with R&D budgets that exceed $100M are required to allocate 3.2% of their extramural R&D budget to fund small businesses through the SBIR program.
Here are some examples of federal agencies that offer funding through SBIR.
DOE and the SBIR
The DOE has three goals within its SBIR program (such as clean energy), and each goal has its own program office.
The DOE also offers funding opportunities for projects that advance alternative fuels and energy-efficient vehicle technologies, through its Clean Cities Coalition Network. State energy offices can also help you identify potential sources for funding in alternative fuel, renewable energy, and energy-efficient technologies.
NSF and the SBIR
The National Science Foundation (NSF) supports small businesses with non-dilutive grants, and awards nearly $190M annually to startups and small businesses through the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program. Each year, they fund about 400 pre-seed companies with early-stage, high-risk technology, across many technology and market sectors.
Since 2015, NSF-funded small businesses have received $9.1B in private investment, and 153 NSF-funded companies have achieved an exit. The program encourages participation in innovation and entrepreneurship by women and people of color, as well as first-time entrepreneurs.
EPA and the SBIR
The EPA runs a yearly, two-phase process for awards in its SBIR program. Each year, they solicit research proposals for specific topics, including Clean & Safe Water, Air Quality, and Land Revitalization. For Phase I, the EPA awards contracts of up to $100,000 for a 6 month “proof of concept.”
The EPA's P3 Grant Program—People, Prosperity and the Planet—is a competition that’s open to teams of college students working to design solutions for a sustainable future. It’s an annual, two-phased research grants program. In Phase I, winning teams are awarded a one-year grant of up to $25,000 to develop their idea and showcase their research in the spring at EPA's National Student Design Expo (NSDE). These teams are then eligible to compete for a Phase II grant of up to $100,000 to implement their design in a real-world setting.
EPA offers funding opportunities through the P3 program annually. The Phase I Request for Applications (RFA) opens in the fall for approximately 45 days. Grants are awarded for the following academic year of study.
NOAA and the SBIR
The NOAA SBIR solicitation is released annually in mid-October, and SBIR topics are based on the Strategic Research Guidance Memorandum released annually by NOAA's Chief Scientist. Recent topics have included Environmental Observation and the Arctic.
The NOAA SBIR program provides up to $120,000 in Phase I to conduct a feasibility study, and up to $400,000 for Phase II research conducted over a two-year period. Between 15 and 25 Phase I projects are awarded each year, and 50% of those receive a Phase II award.
USDA and the SBIR
Every year, USDA provides approximately $27M to small businesses to address the problems facing rural America. Many SBIR award winners have used SBIR funding to develop new products or services.
The USDA points out that not enough small businesses know about its SBIR program, and that some states don’t garner very many awards. They encourage small businesses to partner with university and federal lab researchers to develop technology, processes, or products. And they encourage SBIR participation by women-owned and socially and economically-disadvantaged small businesses.
Many foundations as well as for-profit companies offer grant programs, although the benefits and eligibility criteria vary widely. Let’s take a look at some of the more interesting private grants.
The grand prize winner receives $50,000, plus $7,500 in FedEx Office print services. The second place winner receives $30,000 plus $5,000 in FedEx Office print services, and third place winners receives $15,000 plus $1,000 in FedEx Office print services.
BMO is offering $10,000 grants to women-owned businesses that show a commitment to sustainability. They assess applicants based on their contributions to social, environmental and/or economic sustainability.
The grant round opens June 30, closes August 6, and winners are announced in September (though these dates may change each year). The grand prize is $10,000, and the runner-up grant is $5,000.
To enter, you must be a Nav customer, but you can sign up for a free account. To be considered, you post about a few specific things on social media and try to garner votes, which helps Nav narrow down the top 200 businesses. The co-founders of Nav are “lifelong entrepreneurs who had to go over, through and around roadblocks in order to chase their dream. If this sounds familiar, we want to make your life easier.”
WomensNet founded the Amber Grant Foundation in 1998 to honor the memory of a woman who died at just 19 years old before realizing her business dreams. They fund $320,000 in grants to women-owned businesses throughout the year. To be considered for all these grants, you fill out a single application:
- The Monthly Amber Grant has a $10,000 winner each month, and one of the monthly winners is then selected for the $25,000 Annual Amber Grant.
- The Marketing Grant has three winners per year, and offers marketing help to selected women-owned businesses.
- The Non-Profit Grant has a $5,000 winner each quarter for a non-profit business or organization.
- The Business Specific Grants have a $5,000 winner each month. Categories include mental and emotional support, creative arts, business support services, and more.
- Mini Grants of up to $2,000 are awarded throughout the year.
WomensNet also has tips for finding small business grants for women.
The Cartier Women’s Initiative is looking for women-run and women-owned, for-profit, early-stage, impact-driven businesses. Entrepreneurs across all sectors and from around the world are encouraged to apply. Eligibility criteria include women ownership and leadership. Applications are typically accepted each spring.
Hello Alice partners with enterprise business services, government agencies, and institutions to award $285,000 in grants to Business for All applicants.
- One grand prize winner will receive a $50,000 business grant
- Two runners up will each receive a $25,000 business grant
- Fifteen finalists will each receive a $10,000 business grant
- Three nominated business / entrepreneur support organizations will each receive a $10,000 grant to continue their work in supporting business owners
Hello Alice seeks to award 13 out of the 18 business owner grants to women, people of color, LGBTQ+ entrepreneurs, military connected business owners, and entrepreneurs with disabilities.
The StreetShares Foundation is a nonprofit organization that exists to inspire, educate and support the military entrepreneurial community. Their grant program, the Veteran Small Business Award, helps veterans who lack the financial means to start or grow their small businesses.
Visa is looking for products that deliver innovative payment and commerce solutions to consumers and businesses. Four prizes are awarded during the global finals event: $50,000 for the Overall Winner, $25,000 for the Audience Favorite, $15,000 for 2nd Place, and $10,000 for 3rd Place.
Over the past five years, more than 7,000 startups have participated, and they’ve collectively raised more than $2.5B in funding. The program first launched in the US in 2015, and has since expanded worldwide.
The Fellows Program is a year-long program to help you lead, grow, and scale your business. They consider factors including how your business creates positive and lasting impact, what unique factors differentiate your business, what problems you are trying to solve for, how your business reflects your passion, the substance and quality of your business plan, which obstacles you have overcome, and your investment opportunities.
Winning Fellows receive a one-year fellowship, a $5,000 grant to advance their business education, online community, and trip to the Tory Burch offices for a five-day workshop, networking, and Pitch Day (conditions permitting).
To be eligible, you must be a woman-identifying entrepreneur who owns either a majority stake in a qualifying business, or the largest or equal stake in a qualifying business that is 100% owned and controlled by women. Only one entrepreneur per business may apply.
Your business can be from any industry, but must be for-profit and early stage (one to five years of operations preferred), and generating revenues (minimum of $75,000 strongly preferred).
Nonprofit organizations, idea-stage ventures, and subsidiary businesses or franchises are not eligible for the program.
The Stacy’s Rise Project was created to help bridge the funding gap for founders, and supports small businesses through funding, mentorship, and community. Stacy’s offers $10,000 grants to 10 small business owners. Grant winners also receive virtual mentorship with PepsiCo/Frito-Lay leaders and other industry experts.
Eligible small businesses must have between $25,000 and $1M in annualized sales, and must be at least 50% female founded (based on original founding, rather than current ownership).
Eligible eBay small business sellers can apply to the eBay Up & Running Grants program. Fifty recipients will each receive a grant package valued at $10,000, including cash, coaching through eBay Seller School, and more.
The program is open to existing eBay sellers with active listings in the past 6 months who have an “above standard” or “top rated” performance level, and new eBay business sellers who joined the platform during a specified series of dates.
The Women’s Business Enterprise National Council (WBENC) and Cummins Inc. have partnered on the WBENC Cummins Grant for Black Student Female Founders. This grant provides 12 student entrepreneurs with up to $6,000 in funding to invest in their businesses. Grantees are focused on tackling some of society’s most difficult challenges with responsible products, services, and solutions appealing to individual consumers and corporations.
Businesses started by women of color experience greater difficulties in securing access to capital and receiving funding to grow their businesses. Key elements of the program involve connecting Black experienced woman business owners and executives with Black college entrepreneurs and companies that drive change for a healthy planet.
RISE (Representation, Investment, Strength and Empowerment) is a multi-year commitment to provide marketing, creative, media, and technology services to small businesses owned by people of color.
Eligibility is focused on small businesses that have been in operation for at least one calendar year and that are owned by people of color, which includes Hispanic and Asian American owned businesses, among others. The program is expected to run through December 31, 2022, and you don’t have to be a Comcast or Xfinity customer to be eligible.
The IFundWomen Entrepreneur of the Year program celebrates extraordinary women entrepreneurs who have proven product-market fit, driven growth, and demonstrated a meaningful impact through their businesses.
IFundWomen will be awarding one grand prize winner a $100,000 equity investment. In addition, hundreds of thousands of dollars in monetary grants and coaching scholarships will be deployed to category honorees and runners-up across eight business categories.
The terms are straightforward for the equity investment. If you already have equity investors in your company, IFundWomen will purchase shares at the fair market value of the company at the time of investment, using the same term sheet as your other investors. If your company has never taken on an equity investor, IFundWomen will work with you to either determine a fair market value for the stock and purchase $100,000 of common stock at that price, or invest under a SAFE structure.
The site also provides pre-recorded workshop videos on grantwriting, funding options for pre-revenue startups, and pitching.
Moving forward with your grant strategy
While grants for small businesses may be quite competitive and can require a fair amount of patience to prepare a strong application and wait for a decision, they can be a valuable source of funding. If you’re running a mission-driven, early-stage business that meets the criteria for several of the grant programs we covered, it may be worth adding grantwriting to your list of skills and putting your company in a position to reap the rewards.
Author: Nina Post