Small Business Grants
We've all seen the headlines: "Millions in free government money for your business." Late-night infomercials and Internet advertisements promise grants to start or expand a business. Sound too good to be true? It is.
The Federal government does not provide grants for starting a business. But don't despair. While the government does not give out free money, it does provide the financial support to make it easier for small business owners to get low-interest loans and help obtaining venture capital financing. Also, if you are an existing small business in a very specific industry, you be lucky enough to find grants to help you grow your business.
Facts About Government Grants
Generally, government grants are only awarded to non-profit organizations, academic and research institutions, lending intermediaries, and state and local government. These grants serve a number of purposes including scientific research, technology development, artistic and academic advancement, and economic development. Economic development grants are used by these organizations to create financial and technical assistance programs to support local businesses.
Some government agencies provide grants to existing businesses engaged in very specialized activities. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants aren't necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.
Use our Loans and Grants Search Tool to find these sorts of specialized grant opportunities available from federal, state and local governments.
Small Business Research Grants
A few federal programs provide grants to small firms engaged in scientific research and development (R&D). The Federal government's SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs award a specific percentage of Federal R&D funds to qualified small businesses. SBIR/STTR programs encourage small firms to undertake scientific research that helps meet Federal R&D objectives, and have high potential for commercialization if successful. The following agency award SBIR/STTR grants:
- Department of Agriculture
- Department of Commerce
- Department of Defense
- Department of Education
- Department of Energy
- Department of Health and Human Services
- Department of Homeland Security
- Department of Transportation
- Environmental Protection Agency
- National Aeronautics and Space Administration
- National Science Foundation