Startup Business Grants: Best Free Funding Options
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Startup business grants provide free funding to help small businesses grow without debt. Competition for small-business grants is fierce, however, and many awards require a minimum time in business — often at least six months.
In some cases, newer businesses or true startups may be able to access grant funding, but these options can be more difficult to find. Nevertheless, it can pay to know where to look for future financing.
Here are the best business startup grants, plus alternative funding sources to consider.
How Much Do You Need?
Government startup business grants and resources
Some government programs offer direct funding to startups looking for business grants, but those that don’t may point you in the right direction or help with applications.
Grants.gov
Government agencies routinely post new grant opportunities on this centralized database. If you see an opportunity relevant to your business idea, you can check if startups are eligible. Many of these grants deal with scientific or pharmaceutical research, though, so they may not all be relevant to Main Street businesses.
State and local government grants
The federal government awards a variety of grant funding to other governments, like states or cities, or to nonprofit economic development organizations. Those entities then offer grants to local businesses. Plugging into your local startup ecosystem can help you stay on top of these opportunities. For example, New York state’s website offers a consolidated list of business grants and incubators organized by region.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs
These federal grant programs are designed for businesses with innovative technology or scientific research ideas. Federal agencies list the types of research they’re hoping to fund, and if you think your idea qualifies, you can submit a proposal. Unsolicited proposals aren’t allowed.
Small Business Development Centers
These resource centers funded by the Small Business Administration offer business coaching, education, technical support and networking opportunities. They may also be able to help you apply for small-business grants, develop a business plan and level up your business in other ways.
Minority Business Development Agency Centers
The MBDA, which is part of the U.S. Department of Commerce, operates small-business support centers similar to SBDCs. The MBDA doesn't give grants to startup businesses directly, but these centers can connect you with grant organizations, help you prepare applications and secure other types of business financing.
Startup business grants from private companies and nonprofits
Many corporations and large nonprofits, like the National Association for the Self-Employed, offer startup business grants or organize grant competitions. Some national opportunities include:
IFundWomen Universal Grant Application Database
IFundWomen partners with other corporations to administer business grants. The company generally focuses on small-business grants for women, but also offers startup grants, crowdfunding and coaching, among other resources.
You can fill out a universal application to receive automatic notifications when you’re eligible to apply for a grant.
Amber Grant for Women
WomensNet gives two $10,000 Amber Grants each month, two $25,000 grants annually, and a variety of other grants throughout the year. Although startups are eligible for all grants, the company also awards a $10,000 grant specifically to new businesses every quarter.
Filling out one application makes you eligible for all Amber Grants. To qualify, businesses must be at least 50% women-owned and based in the U.S. or Canada.
>> MORE: Best small-business grants for women
National Association for the Self-Employed Growth Grant
Join NASE, and you can apply for quarterly Growth Grant opportunities. There are no time-in-business requirements for these grants of up to $4,000, but you’ll need to provide details about how you plan to use the grant and how it will help your business grow.
Incfile Fresh Start Business Grant
If you plan to start a business — or have just launched a new endeavor, you may be able to get a $2,500 startup business grant from Incfile. Incfile’s Fresh Start Business Grant can be used to cover startup costs and also includes free formation services from the company.
To qualify, you’ll need to be at least 21 years old, a U.S. resident and planning to start or grow your business in a significant way. Applications require a sample business plan, as well as a two-minute video.
Incfile has not yet announced its next grant cycle, but updates will be posted to its website.
Venmo Small Business Grant
The annual Venmo Small Business Grant offers $10,000 grants to 20 business owners. This program also provides mentorship from industry leaders and the opportunity to be featured on Venmo’s social media pages.
To qualify, you need to have a U.S. Venmo business account in good standing. You also need to have fewer than 10 employees, less than $50,000 in annual sales and have sold $500 or more in goods and services at least three months before the start of the grant program.
Venmo announced winners for the 2023 grant cycle in October. You can receive the latest updates about the 2024 cycle through your Venmo business profile.
FedEx Small Business Grant Contest
This annual competition awards grants to small-business owners in a variety of industries. You can sign up to receive an email when each application period opens. To be eligible, you’ll need to have been selling your product or service for at least six months. Be mindful, though, that each grant cycle receives thousands of applications.
Tory Burch Foundation Fellows Program
The Tory Burch Foundation Fellows Program is designed to provide funding, education and other resources to women-owned startup businesses.
Each year, the program chooses 50 small-business owners to participate in a yearlong initiative that includes workshops, networking groups, a $5,000 business education grant and a culmination presentation. Tory Burch Fellows participants also receive access to 0% interest loans through Kiva.
To qualify for this startup grant program, you must be a women entrepreneur who owns 51% or more of your business. You also must be an early-stage company (ranging from one to five years in business) that generates revenue (the program prefers a minimum of $75,000).
Applications are closed for the 2024 Fellow cycle, but you’ll be able to find updates for the following cycle on the Tory Burch Foundation website.
Small-business incubator programs
Business incubators or accelerators are designed to help companies in various phases of the startup stage — providing education, workspaces and mentorship. Some also provide funding in the form of grants, pitch competitions with cash prizes or access to investors upon completion of their program.
Although there are a range of programs for general startups, certain incubators target specific demographics, like underserved business owners. Head Boss in Charge Headquarters (HBICHQ), for example, is a Seattle-based nonprofit that serves women and minority-owned startup businesses. It offers merit-based grants for graduates of several of its educational programs.
Other programs are designed to offer support for certain industries. Accelerate Long Island, for instance, is a nonprofit designed to help high-growth biotech and health technology companies.
The program may provide startup grants to participants in conjunction with funding partners on a case-by-case basis, and it helps new businesses navigate New York state tax incentives and find workspace by partnering with local universities.
To find these types of institutions near you, you can do an online search for “[Your City] business incubator.” Even if you don’t see a grant program, it can be helpful to sign up for their email newsletter or follow them on social media. Like SBDCs and MBDAs, startup incubators often provide business coaching, courses and lectures that can help you develop and grow your business idea.
» MORE: How to fund your business idea
Alternatives to startup business grants
Finding and applying for new business grants can be difficult and time-consuming — plus, not all startups will qualify. If you’re looking for other ways to fund your business, you might consider these alternatives:
SBA microloans
SBA microloans offer up to $50,000 to help your business launch or expand. In fiscal year 2023, the average microloan was $15,644.
The SBA provides microloans through intermediary lenders, usually nonprofit financial institutions and economic development organizations. After receiving financing from the SBA, these lenders administer, underwrite and issue their own microloans.
As a result, SBA microloan requirements vary largely by lender. Many intermediaries are willing to work with startups, however. In fact, startup businesses received 24.6% of all SBA microloans issued in fiscal year 2023.
You can use the SBA’s website to find a lender in your state.
Friends and family
Asking friends and family to provide an investment for your business is a common form of startup funding. This type of arrangement can place a strain on relationships, however, so you’ll want to be careful.
You’ll want to define each person’s investment — is it a loan or are they getting equity in your business? If you’re receiving a small-business loan, you’ll want to lay out the rates and terms and detail how you’re going to pay it back.
You should put all agreements in writing, if possible.
Business credit cards
You can qualify for a business credit card with your personal credit score and some general information about your business, like your business name and industry.
Because startup business credit cards often earn rewards for spending, they can be great for daily expenses, but aren’t typically suited for larger purchases. If you make a large purchase on your credit card and can’t pay it back right away, you’ll start accruing interest on your balance, which can become expensive and difficult to manage.
It’s also important to keep in mind that you’ll likely need to sign a personal guarantee with your application — which means you’ll be held responsible for paying back the debt if your business can’t.
Crowdfunding
If you have a dedicated customer base, they can help finance your business through crowdfunding. In exchange for capital, businesses usually offer something for their supporters, like debt notes, equity shares or access to an exclusive event.
You can compare a variety of crowdfunding platforms that offer different terms, such as Kickstarter, Indiegogo and StartEngine, to find the model that works best for you.
