How to Find Government Grants for Businesses

With access to capital being so tight right now, grants are a hot topic among cash-strapped entrepreneurs looking to start or expand a business. Each year, the United States government supports businesses by providing billions of dollars in grants administered by 26 different federal agencies. More than 1,000 business grant opportunities are offered through the federal government each year and thousands more are offered through state and local agencies.

Out of the $600 billion in grants the federal government gives out every year about 5% ($30 billion) are awarded to businesses. The rest go to states, governments, governmental agencies, nonprofit organizations, universities, schools and school districts. When the federal government does provide grants directly to businesses, most are awarded to support research and development activities—primarily related to technology, energy, healthcare, public safety and criminal justice, among others.

Although 5% may not seem like a lot, it still amounts to $30 billion in grants that the federal government does award to businesses each year. Though you won’t find any federal grants specifically for starting a business or paying off debts, the range of business activities that federal grants support is broad enough on its own. As a grant writer myself, recent examples of funded business grants I have written included a $1 million grant to develop a renewable energy technology and a $9 million grant to commercialize a new concept in computing (U.S. Department of Energy). Other examples of awarded business grants include $91 million to develop solar PV cells (U.S. Department of Energy), $1.1 million to develop a communications infrastructure (U.S. Department of Agriculture) and $800,000 to support job skills training for rural populations (U.S. Department of Labor).

Before you begin looking for a grant for your business, keep the following facts in mind:

1) The federal government does not give out grants to start a business or pay off business debt—not even for women or members of minority groups.

2) There are grants available to start a business, but they are almost exclusively awarded by private foundations, not governmental agencies.

3) Regardless of the source, applying for a business grant requires effort and preparation and managing the award afterwards, demands a high degree of accountability.

If you want to find grant opportunities available through the federal government then Grants.gov is where you should start looking. 100% of all grant opportunities offered by all 26 federal grant-making agencies such as the Department of Energy, Department of Homeland Security, Department of Health and Humans Services and more are available through this site.

If you do want to seek a business grant offered by the federal government, you will need to remember that federal grants available to businesses are aligned to national priorities and awarded in one of four categories: research and development, education and job skills training, public works and infrastructure development, and job creation. Grant awards can range from $25,000 up to the millions. If your business model doesn’t fit into one of these categories then you might consider reframing your project so that it does by partnering with a school, university or nonprofit organization. Look at your project from different angles and get creative.

Many—but not all—state governments also offer business grants too. These grants tend to be focused on technology development, education, job skills training and job creation, with awards ranging from $10,000 up to several hundred thousand dollars. Local governments may also offer grants to support area businesses. The business grants offered through local governments are generally smaller, with most grants falling between $1,500 up to about $10,000. Check with your or local economic development office to see what might be available where you live.

For a grant to start a business with, you’ll need to focus your search on private foundations. The majority of charitable foundations don’t award grants for business projects but there are some that do—most of these are focused on women’s and minority issues. Otherwise, your best bet to find a grant to start a business is to search for business competitions. These usually sponsored by a private foundation, a corporate foundation or a university and typically offer grants of up to $100,000 along with ongoing access to expertise and technical assistance.

Remember to be cautious before proceeding and remember that no governmental funding agency, private charitable foundation or corporate foundation will ever charge a fee to apply for a grant. Also, be aware that researching, applying for and obtaining a business grant can be a time-consuming process that can take up to six months. Nevertheless, with the proper preparation and a bit of tenacity, it is possible and can be done.

Ron Flavin is an entrepreneur, author, speaker and expert on the subject of grants. He has secured more than $114 million in grants for a wide range of clients, including businesses, tribal governments, non-profit organizations, schools, universities and governmental agencies in the United States and abroad. Visit his website to learn more.