Tips to Win New Business Grants: A Step-by-Step Guide

What New Business Grants Are (and Aren't)

A grant is a form of funding that you don't have to pay back. They aren't offered through lenders and there's no interest rate or equity to worry about. Instead, new business grants are awarded by federal agencies, state governments, nonprofit organizations, corporations, and community development foundations. They're typically to given businesses that serve a specific economic, social, or research purpose.

While there are exceptions, new small business grants aren't often handed out just because your business is promising or exciting. Instead, they're awarded because your business fits some goal that a specific grant program is trying to achieve. For example, USDA programs support rural businesses while Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs fund research and development. Women-owned businesses, veteran-owned businesses, minority-owned businesses, and Native American entrepreneurs have dedicated grant opportunities specifically for them too., and Native American entrepreneurs have dedicated grant opportunities specifically for them too.

Now that you know what grants are, here are a few things that grants aren't:

• They aren't loans. You don't have to repay grant funding (though you may need to meet certain requirements around using and reporting the funds).

• Grant eligibility isn't universal. Grants tend to have strict (and very specific) eligibility requirements, so applying to the wrong program is just a waste of time.

• They aren't fast. Federal grants can take months from application to award, so if you need funding fast, grants usually aren't the way to get it.

• They aren't guaranteed. Grants are incredibly competitive and even a strong application has a small chance of winning.

Where to Find New Business Grants

Getting free money for your business via a new business grant is really a best-case scenario. It gives you financial assistance, and you can use that cash for various business. But unlike a loan, you don't have to pay interest or even give the money back.

Here are some places to start your search if you're looking to apply for a new business grant.

Grants.gov

Grants.gov is the main database for federal grants in the US. There, you'll find thousands of funding opportunities from various federal agencies, and you can search each of these available grants by keyword, eligibility, or category.

Not all businesses will qualify for federal grants. If you're a new or existing business curious about government grants and their requirements, though, this may be the best starting point. Just be sure to read the eligibility requirements carefully before spending time on an application. Federal programs are notoriously strict compared to grants offered by other organizations.

SBA grants

In addition to backing SBA loans, the U.S. Small Business Administration (SBA) also connects small business owners with grant opportunities through its network of Small Business Development Centers (SBDCs), Women's Business Centers, and SCORE mentors. SBDCs in particular offer free technical assistance to entrepreneurs trying to find and apply for grant funding. They also have resources for reviewing your application before you submit it (helping better your chances of approval), which is one of the most useful business resources they offer.

There are a handful of direct grants available through the SBA network, but they are limited in nature, especially to for-profit businesses.

SBIR and STTR programs

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are some of the most significant grant programs available to for-profit businesses, especially those in the early stages.

The requirements for these grants are notoriously pretty demanding, both from a technical and administrative standpoint, so don't expect the process to be a walk in the park. However, the funding offered can be substantial. Phase I SBIR awards can run as much as $275,000, while phase II funding easily reaches up to $1.75 million.

If your business involves research and development, these new business grant programs deserve your attention.

State and local

There are many small business grant programs offered by states, counties, cities, and local governments, though these are often tied to specific economic development goals. Some grants might focus on rural business support or community development, while others have their eye on e-commerce expansion or job creation. programs offered by states, counties, cities, and local governments, though these are often tied to specific economic development goals. Some grants might focus on rural business support or community development, while others have their eye on e-commerce expansion or job creation.

Local chambers of commerce and economic development agencies are good starting points if you want to find these types of grants. Since they're limited to eligible businesses in specific areas, the competition is less fierce and you may have a better chance at winning one.

Corporate and direct grants

Corporate programs from companies like FedEx and Visa run competitive grant contests regularly, often with easier application requirements than federal programs. You can also find direct grants from companies like Shopify, Tory Burch, Avon, and more. The Amber Grant Foundation has a rolling grant aware program that gives monthly grants to women-owned businesses... the opportunities are everywhere!

Building an Application Stack

There's a lot that goes into a competitive grant application, especially if you're looking at one of the more competitive new business grant programs. The reviewers for these bigger grants can often go through hundreds of submissions, so finding ways of making yours stand out is important. After all, a weak application may get eliminated early on.

The full set of documents, including any necessary supporting materials, is called an “application stack.” Preparing some of this stack ahead of time can ensure that you don't miss any last minute new business grant opportunities and that you can focus on any grant-specific requirements (like essays, presentations, and more).

Unique Entity ID (UEI)

Before applying for any federal grant, you'll need to register on SAM.gov and obtain a Unique Entity Identifier (UEI). Requesting a UEI is free but it can take many days (or even weeks) to get, so this can be a big barrier to many new business grant applications. It's not uncommon for a business to start a grant application, reach the submission page, and realize they don't have a UEI and can't finish the application.

Before writing your grant application, go to SAM.gov and start the registration process to get your UEI first. This registration needs to be renewed annually, too, and a lapsed registration will disqualify your submission even if everything else is perfect.

A grant-specific business plan

Your same old business plan isn't going to cut it if you want to compete for new business grants. Reviewers will want to see that your business plan speaks directly to the goals of the grant program. For example, if the program supports economic development in underserved communities, your plan should explain how your business contributes to that.

Your impact statement

Most grant applications get personal, asking some form of, “What impact will this funding have if we give it to you?” Just saying that a new business grant will help grow your business isn't going to cut it, so don't use this space to be vague.

Instead, speak to the grant's purpose, being specific and using numbers wherever you can. Saying something like, “This grant will allow us to hire three full-time employees in a rural county with a 14% unemployment rate” means a lot more than “this will help my business grow.”

Financial transparency

Federal grant funding programs want to see detailed financial documentation, including recent tax returns, current financial statements, a budget (including how the new business grant funds would be spent), and sometimes a reimbursement schedule tied to project milestones. Business grant reviewers are looking for signs that your business is healthy enough to see the project through and that your budget is realistic.

Grants for New Business Owners

Some of the best new business grant opportunities are targeted, meaning they're designed for business owners or companies that fall into specific categories. If any of these apply to you, here are some places to begin your grant search:

• Women-owned businesses: SBA Women's Business Centers, the Amber Grant, IFundWomen, Galaxy Grant, and the Cartier Women's Initiative

• Veteran-owned businesses (including military spouses): SBA Boots to Business, Accion Opportunity Fund, state-run and veteran-specific business grants

• Minority-owned businesses: The Minority Business Development Agency (MBDA), NAACP Powershift Entrepreneur Grant

• Rural businesses: USDA's Rural Business Development Grant program and REAP

• Research-driven startups: SBIR and STTR programs from NIH, NSF, DoD, and DOE

• Native American entrepreneurs: The Administration for Native Americans (ANA) and Bureau of Indian Affairs

Final Thoughts

Winning new business grants can be a great way to access free, powerful funding that you don't have to repay, making them an important part of your small business financing arsenal. Entrepreneurship grants can help grow your business in a more meaningful way, whether you're a brand new business owner or someone who's been operating for years.

Applying for (and winning) new business grants takes more patience than most entrepreneurs realize, though. Grants are usually very competitive, and the eligibility criteria can be incredibly narrow. Even if you're a great fit, have an innovative business, or would do great things with the money, getting noticed and winning can be difficult. That's why it's important to not only cast a wide net when searching for new business grants, but also get all of your ducks in a row ahead of time, from financials and your UEI number to a strong business plan and mission statement.