22 Sources of Free Money to Start a Business

Many entrepreneurs want to start a business but have no money. We have answers for entrepreneurs who ask, “How can I fund my business with no money?

Brad Nakase, Attorney

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For six months, Andrew has been working hard to get his organic food market off the ground. As a startup, he has a unique concept that has gained traction in his local community. Everyone loves his vegan and gluten-free focus, as well as his passion for sourcing locally and responsibly. However, his business has proved very expensive to operate, especially at the beginning of its life. Andrew is starting to run out of money. He talks to his friend, Jenna, who works for the local government. She suggests that Andrew explore various grant options. Jenna tells Andrew that the federal government, as well as the state government and even private companies all offer grant programs for small businesses like Andrew’s store. However, she says, many grants target specific types of businesses so Andrew will need to identify one that suits his company. Andrew does his research and comes across a grant that looks for small businesses with a passion for sustainability and the environment. Bingo! Andrew applies to this program and later learns that he has won a grant of $25,000. Thrilled, Andrew is able to stabilize his business with the money.

When starting a new business, or simply maintaining an existing one, finding money is often a difficulty. However, startups and businesses in need of financial support have access to free money through small-business grants. These grants can also assist businesses harmed by the coronavirus pandemic.

The process of researching and applying for funding can take time and energy, but getting a grant for one’s small business can be the difference between success and failure. There are plenty of federal, state, and private small-business grants that can help a new business owner start a small business.

Federal Small-Business Grants

Government agencies are responsible for distributing a large portion of business grants, which are meant to support a diverse group of businesses ranging from ecological conservation to childcare. It may be nerve-wracking to submit an application to the federal government, but these federal grants present excellent chances for small business owners to grow their companies. Some federal grants include the following.

1. Grants.gov

Grants.gov is an in-depth database that covers all the small-business grants that are given out by different federal agencies. For instance, the Department of Education and the Department of Veterans Affairs both give out grants to small businesses.

2. Small Business Innovation Research and Small Business Technology Transfer Programs

The Small Business Innovation Research program (SBIR) and the Small Business Technology Transfer program (STTR) are grants that are meant to support research and development for technology innovation and research in the sciences. These programs help match small businesses with federal grants and contracts coming from eleven different government agencies.

To receive one of these grants, one must run a for-profit company and have a maximum of 500 employees.

3. USDA Rural Business Development Grants

The Rural Business Development Grant program is run by the U.S. Department of Agriculture. This program offers financing to improve and grow businesses in rural locations.

To qualify for this program, a business must have fewer than 50 employees and make less than $1 million in revenue. Also, the business must be located in a select rural area. To apply, one should submit an application to the USDA Rural Development’s local or state office.

4. Program for Investors in Microentrepreneurs (PRIME)

The PRIME program is responsible for offering federal grants to microenterprise development organizations. The purpose of the program is to give financial aid to disadvantaged microentrepreneurs. Development organizations that have recently received funding include the Nebraska Enterprise Fund and the Micro Enterprise Services of Oregon. The organizations can be private nonprofits or run by state or local governments.

State and Regional Small-Business Grants

5. Economic Development Administration

The Economic Development Administration is an agency that is part of the U.S. Department of Commerce. It offers grants, resources, and assistance to support communities’ economic growth, as well as to support entrepreneurship and innovation in that locale.

The Economic Development Administration in each state can help businesses secure financing, which might include state or regional grants. The agency can also help find locations and recruit employees. To look up agency offices and search local resources, one can search the economic development directory.

6. Small Business Development Centers

A Small Business Development Center is a local agency that can help support a small business or aspiring businessperson. Usually, these centers are associated with local colleges or the state’s economic development agency. These centers can help a small businessperson find grants, in addition to other financing ideas. They also offer counseling, training, and help with the technical aspects of running a business.

7. Minority Business Development Agency Centers

The Minority Business Development Agency Center is in charge of a countrywide network of centers that are devoted to assisting and financially supporting minority-owned small businesses. MBDA centers help these businesses secure capital, make contracts, and compete in the marketplace. They essentially help minority-run businesses grow and become competitive.

A minority-run small business can get in contact with their local MBDA center to apply for debt-based financial support. There, they can also apply for federal, state, and local business grants. The agency typically holds an annual small-business grant competition. Information about this contest can be found on the MBDA website.

8. State Trade Expansion Program (STEP)

STEP grant programs help small businesses cover the costs of starting businesses or expanding into international markets. The specific amount of funding and eligibility depend on the particular state. The capital provided can be used to take part in export trade shows, design products meant for international marketing, and support the globalization of the company’s website.

9. Corporate Small-Business Grants

Some corporations and major companies participate in philanthropy or charity. They often run programs that include small-business grants. Some large companies offer grants to nonprofits in specific industries, while others also give grants to for-profit small businesses.

10. FedEx Small Business Grant Contest

FedEx holds an annual grant contest that awards 10 small businesses over $250,000 in prize money. The prizes include a $50,000 grant and $4,000 in FedEx business services. The competition targets for-profit small businesses based in the United States. These companies must be in operation for at least six months and have no more than 99 employees.

11. National Association for the Self-Employed

Members of the National Association for the Self-Employed can apply for monthly grants that are valued up to $4,000. There are also annual $3,000 college scholarships for members’ dependents. Grants are awarded throughout the year. Applications are reviewed on a quarterly basis, in January, April, July, and October.

12. Fast Break for Small Business

LegalZoom, the NBA, the WNBA, and NBA G League, together with the Accion Opportunity Fund, provide grants valued at $10,000 to small-business owners. Also offers are up to $500 in LegalZoom services. The program targets businesses in underrepresented communities. Eligible small business owners can submit an application twice a year.

13. Patagonia Corporate Grants Program

Nonprofit small businesses that are involved in environmental protection causes can receive a small-business grant from the Patagonia Corporate Grants Program. Patagonia aims to find innovative companies that have environmental protection projects underway. These projects should have specific and attainable goals. The grants are typically valued at $5,000 to $20,000.

14. Visa Everywhere Initiative

The Visa Everywhere Initiative is a competition that provides funding to tech startups around the world. Small business owners who apply need to demonstrate how their product or service involves Visa’s products in innovative ways. Visa picks twenty-five finalists from around the world, and the selected companies go on to compete at a global event. The winner of this event receives a grant worth $100,000. There are additional grants awarded based on runners-up, audience favorites, and regional winners.

Startup Business Grants

If a small business has trouble finding an available federal grant, there are also grants available through state and local governments, as well as private companies. These grants are targeted at startup businesses.

15. U.S. Chamber of Commerce Dream Big Awards

The Dream Big Awards is an annual competition that rewards small businesses for their contributions to the U.S. economy. The prize is a grant worth $25,000. The contest also awards prizes to businesses in different categories, including beginning businesses and green businesses. In order to qualify for the contest, one must have an existing business. However, the business only needs to have been in operation for one year in order to be eligible.

16. Hello Alice Grant Platform

Hello Alice works together with various companies including DoorDash and Progressive to offer grants to small businesses. It is possible to create an account to get messages about new opportunities and to apply to grants related to one’s business.

17. Comcast RISE

The Comcast RISE program provides startup businesses with free marketing services and technology assistance. The RISE awards are granted on a quarterly basis to businesses that have been in operation for at least a year. In order to qualify, a business must be located within the Comcast or Effectv service region. Also, the business needs to be 51% owned by a woman or a person of color.

18. Amber Grant for Women

The Amber Grant is offered by WomensNet. $10,000 is granted on a monthly basis and two $25,000 grants are awarded on an annual basis. The foundation also provides funding throughout the year in addition to these prized. To be eligible for any of these grants, a company needs to fill out an application, and it must be a woman-owned business.

19. COVID-19 Grants for Small Businesses

While many grant programs on a federal, state, and private level are no longer accepting applications, there are still options for small businesses that have been financially affected by the coronavirus pandemic.

20. SBA Small-Business Grant

These are grants issued by the U.S. Small Business Administration in response to the COVID-19 pandemic as part of a relief effort. These include the Shuttered Venue Operators Grant and the Restaurant Revitalization Fund. However, these programs have closed and are no longer accepting applications. Also, it is no longer possible to apply to the Economic Injury Disaster Loan grant, which has expired.

21. State and Local Coronavirus Small-Business Grants

In some states and local governments, there are still active COVID-19 relief efforts related to small business relief. In New York, for example, small businesses can get a grant of $50,000 through the New York State COVID-19 Pandemic Small Business Recovery Grant Program.

Another example would be in Sonoma County, California. Here, microbusinesses can apply for grants worth $2,500 via the California Microbusiness COVID-19 Relief Grant Program. If interested, one can visit the secretary of state website, the department of economic development website, or any official local government or state websites for information about what might be available for one’s business.

22. Corporate COVID-19 Small-Business Grants

While some private companies no longer offer COVID-19 relief grant programs, there may still be a few active options. For example, the nonprofit Main Street America still offers its Inclusive Backing Grant Program, which it offers in partnership with American Express. Currently, this program offers COVID-19 relief funds to physical, brick-and-mortar businesses owned by women, nonbinary individuals, and U.S. veterans.

Alternatives to Grants

It can be difficult to find and receive grants for one’s small business. However, grants are not the only way of funding a small business. If a business does not qualify for a grant, then there are other options, including the following.

  • Small-business loans: a business owner can consider getting a bank loan, an SBA loan, or a line of credit.
  • Small-business credit cards: there are dozens of cards to choose from and many offer rewards.
  • Crowdfunding: use an internet crowdfunding campaign to raise money or promote a product.

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