5 Best Federal and State Small Business Grants in 2024
If you’re like most small business owners, free money most likely sounds too good to be true. With small business grants, you can get crucial funding that doesn’t have to be repaid.
One avenue for finding grants is through the federal and state governments’ small business grants. We’ve made it easy for you to find the right grants for your business by compiling the top federal and state small business grants to get you the funding your business needs.
Top Federal and State Small Business Grants
The first step to securing funding through small business grants is to find the grants that best match your business’s needs. This not only makes the application process easier, but it increases the likelihood of you winning the grant money.
Our Approach:
Choosing the best business grant comes down to three things:
- The type of business you have
- The needs of your business
- What you want for the future of your business
Our Top Federal and State Business Grants:
- Grants.gov is the best database for federal business grants. Grants.gov is a tremendous resource to find and apply for federal grants for your business.
- Small Business Innovation Research Program (SBIR) is best for tech businesses. Tech-focused businesses can apply for grants through the SBIR to develop and research technologies for a number of government institutions.
- Rural Business Development Grants offer the best grants for rural small businesses. Businesses located in rural areas can request funding through this source that works towards empowering small business owners to support rural communities.
- Small Business Development Center (SBDC) offers the best support when applying for small business grants. SBDC offers a wide range of support for small businesses across the country, including guidance on securing grants and other funding.
- The US Economic Development Administration (EDA) offers the best state small business grants for innovation. The EDA is a state-run small business resource that compiles all of the tools entrepreneurs need to fund and run their businesses for free.
Best Database for Business Grants: Grants.gov
Grants.gov is an extensive resource for small businesses searching for federal and state government grant opportunities. Not only can you search for grants that suit your business needs, but you can register and apply for them as well using this online platform. In addition, you can read the eligibility of federal or state grants in order to verify that your business qualifies.
Pros
- This website provides a single platform for finding and applying for government grants.
- On Grants.gov, you can also acquire applicant training that will help you secure funding for your business.
- There is now a downloadable app that allows you to search, apply, and check on applications for grants wherever you are.
Cons
- This website has a lot of content that can be overwhelming if you aren’t used to the process of finding and applying for grants.
- Federal and state grants can be very competitive, with many applicants vying for the same funding.
Best for Tech Businesses: SBIR Program
Grant amount: $150,000-$1 million
The SBIR program provides grants for small businesses and entrepreneurs to enable them to develop and research high-tech innovations for federal agencies that have the potential for commercialization. Common areas for businesses that receive this funding include homeland security, clean drinking water, healthcare, green construction, and more.
The mission of this program is to support scientific excellence and innovative technology to grow and build the US economy. For technology businesses, the SBIR program provides substantial seed money and contracts with government agencies that will help qualifying businesses research and develop new technologies.
To apply for an SBIR business grant, you need to meet the following criteria/eligibility requirements:
- Applicants must be a for-profit business.
- Applicants must have less than 500 employees.
- A majority of ownership must be held by one or a combination of the following:
- One or more individuals that are citizens or permanent residents
- Other for-profit businesses
- Venture capital-operating companies, hedge funds, or private equity firms.
Pros
- Winners of the SBIR business grant can be provided with grants and contracts with 12 government agencies.
- While the grant amount starts at $150,000, promising and successful candidates can receive up to $1 million in additional funding.
- Each of the participating government agencies creates their own guidelines and eligibility requirements which means you have a better chance at securing funding if they align with a specific agency’s requirements.
Cons
- This grant is highly competitive, which means only a small number of applicants receive grant money through this program.
- The application process is lengthy and time-consuming, which can be a struggle for small business owners.
Best for Rural Small Businesses: Rural Business Development Grants
Grant amount: No maximum
The Rural Business Development Grants are provided to small rural businesses to grow existing businesses in many ways. There is no maximum for the amount of funds a grant can supply; however, small requests are given higher priority.
There are two types of grants offered by this organization: enterprise grants and opportunity grants. Each has different stipulations for how funding can be used in the community.
To apply for a Rural Business Development Grant, you need to meet the following criteria/eligibility requirements:
- Applicants must have less than 50 employees.
- Applicants must have made less than $1 million in gross revenue.
- Applicants must be located in what is considered a rural area by the USDA.
Pros
- Since they are two types of grants offered by this organization, there are more opportunities to find funding for small rural businesses.
- There is no maximum for the amount of funding businesses can request.
- Applications aren’t limited to a certain type of business; all businesses can apply.
Cons
- There are specific stipulations for how the funds from each grant can be spent.
- This is not a grant opportunity to start a business.
Best Business Grant Support: SBDC
SBDCs are government resources that help small businesses find the services and funding they need to succeed. Small business owners can find their local SBDC office for face-to-face business consulting to help them better understand how to successfully find and apply for grants that suit their business needs.
Pros
- SBDC locations are local and dedicated to supporting their surrounding communities.
- All of SBDC’s services are free of charge.
- Business owners can find a multitude of services that will help them start or maintain their small businesses.
Cons
- This resource doesn’t offer grants; consequently, it is only a resource to help small businesses obtain them.
Best State Business Grant for Innovation: EDA
Grant amount: Varies depending on the grant
The EDA is an agency of the US Department of Commerce that provides grants, resources, and support for small business owners and entrepreneurs. The mission of this agency is to provide small business owners with the free tools and funding they need to dedicate their time to innovation and entrepreneurship.
To find grants from the EDA, you can easily search their database of available grants and find local funding opportunities by searching for resources in your state.
To apply for an EDA business grant, you need to meet the following criteria/eligibility requirements:
- Due to the EDA being only a source for finding grants, eligibility will vary based on the grant you’re applying for. Be sure to read the requirements carefully before proceeding with your application.
- Since grants are processed through Grants.gov, applicants must create an account on the site.
Pros
- The EDA provides an easily searchable database of available grants making it easy to find the right grant for your business.
- There are state-level resources available for small businesses through the EDA.
- Grants are available at various times of the year, so you don’t have to worry about meeting a singular deadline.
Cons
- Since this isn’t a specific grant offered by the EDA, finding the best one for your business can be overwhelming.
- This is a widely used source for small businesses, so grants may be highly competitive.
Final Thoughts
Finding funding for your small business can feel like a full-time job. Small business grants provided by the federal and state government can serve as free money for your business to thrive. However, if you aren’t finding grants that suit your business needs, there are alternatives to check out, such as business loans and lines of credit.
