Get Free or Low-Cost Federal Funding for Your Startup

Federal Funding Programs for Small Businesses Startups

Posted 6 months ago by Max Komonov

Small business owners often struggle to桂understand how to桂raise money to桂help them launch their startups. Too many rush into taking on桂investors who consume part of桂their company�셲 profits 껸꾈삣桂have a桂say in桂important decisions, even when their views don�셳 align with the桂founder�셲 vision.

For these reasons, we桂recommend that when you�셱e starting out, you look into what your federal government can do桂for桂you. You might be桂surprised that there is桂혫free money혬 available through small business grants, 껸꾈삣桂low-cost loans from the桂桂�� both perfect opportunities to桂get your hands on桂federal funding for桂startups.

Small Business Grants

First, a桂word about small business grants.

Though there are countless programs available at桂, remember: you don�셳 just fill out a桂form 껸꾈삣桂wait to桂cash in. For any桂government grant program, you can expect a桂good amount of桂paperwork to桂fill out, 껸꾈삣桂a桂waiting period to桂see if桂you qualify. These grants are built around providing access to桂company missions that will prove assets to桂their community, so桂also remember that the桂proof will be桂in桂the桂pudding.

For the桂purpose of桂this article, we桂will be桂focusing mostly on桂government grants located in桂the桂United States for桂residents 껸꾈삣桂US-based businesses. But even if桂you�셱e located outside the桂US, many of桂these tips are applicable, 껸꾈삣桂we桂encourage you to桂look into the桂specifics of桂obtaining a桂government grant, no桂matter where you live.

To桂give you the桂best chances of桂getting a桂small business grant, the桂government advises that you thoroughly review all of桂the桂eligibility guidelines before applying. There will be桂technical, legal, 껸꾈삣桂administrative prerequisites, 껸꾈삣桂assuming you get the桂funding, there will be桂ongoing reporting 껸꾈삣桂bookkeeping, as桂well as桂audits to桂ensure you are living up桂to桂the桂terms of桂the桂grant.

Examples of桂Federal Grants

Small Business Technology Transfer Program (STTR)

This program funds research in桂the桂R&D arena. However, for桂this grant, the桂small business needs to桂have a桂formal collaboration with a桂research institution. To桂qualify for桂, you must operate a桂for-profit company 껸꾈삣桂satisfy other requirements.

U.S. Department of桂Agriculture Rural Development Business Programs

The USDA�셲 Rural Development Business Programs 껸꾈삣桂technical assistance to桂promote rural business growth. They offer loans, grants, 껸꾈삣桂guarantees with the桂goal of桂enhancing economic opportunities 껸꾈삣桂job creation in桂rural communities.

U.S. Department of桂Commerce Minority Business Development Agency (MBDA)

These grants 껸꾈삣桂 loans are designed to桂help minority-owned businesses 껸꾈삣桂are offered throughout the桂year. Minority-owned businesses can find information about local MBDA Business Centers at桂.

U.S. Department of桂Education Grants

The U.S. Department of桂Education (DOE) has in桂the桂education sector. These grants can be桂made available for桂public schools, state agencies, or桂nonprofit organizations; however, also allows for桂applications from for-profit private sector companies. Deadlines for桂currently available DOE grants run through December 12, 2024, with more grant opportunities coming soon.

U.S. Small Business Administration State Trade Expansion Program (STEP)

This program distributes federal funds through state entities 껸꾈삣桂is桂intended to桂, participate in桂foreign trade missions 껸꾈삣桂shows, obtain entry to桂foreign markets, develop websites, 껸꾈삣桂design international marketing products or桂campaigns.

U.S. Economic Development Administration (EDA)

The EDA is桂part of桂the桂U.S. Department of桂Commerce 껸꾈삣桂offers ongoing funding development including construction, planning, technical assistance, research 껸꾈삣桂evaluation, higher education, 껸꾈삣桂more.

State &桂Local Governments

You should also know that many federal grants for桂small businesses are distributed to桂state 껸꾈삣桂local governments, so桂you should always check there, too, for桂specific programs that could help out your business. Speaking of桂specific programs, grants are not typically general in桂nature桂�� meaning that they are meant to桂serve a桂certain purpose. Here are a桂few examples:

The (SBIR) program invests in桂small businesses focused on桂R&D, specifically high-tech innovation.
The (STTR) program requires small businesses to桂collaborate with a桂research institution.

The is桂a桂popular program (though technically FedEx is桂not a桂federal entity) that requires businesses to桂have shipping needs.

Small Business Loans

If桂you�셱e looking for桂a桂federal loan, there is桂no桂better place to桂start than at桂the桂U.S. Small Business Administration (SBA). You may have heard of桂the桂SBA before, but did you know that in桂addition to桂helping you secure loans, they will guide you through planning, launching, managing 껸꾈삣桂growing your business?

At桂your fingertips, you will have access to桂free business consulting from experts 껸꾈삣桂funded partner organizations like (SBDC) network, which runs community-based offices across the桂country. Though the桂SBA is桂where you go桂for桂federal funding for桂your startup, the桂SBDC will save you money by桂providing:

Free business consulting
Advice for桂accessing capital
Business planning
Technology development
Regulatory compliance
Marketing
International trade assistance

When you are ready to桂apply for桂funding from the桂SBA, they will match you to桂lenders near you that specialize in桂SBA-guaranteed loans. The agency itself doesn�셳 lend money directly to桂small businesses but instead sets guidelines to桂reduce the桂risk for桂both you 껸꾈삣桂the桂lender.

These loans provide many benefits, like competitive terms, rates, 껸꾈삣桂fees. Some loans come with ongoing support to桂help you start 껸꾈삣桂run your business. And they offer lower down payments 껸꾈삣桂flexibility you won�셳 find on桂your own.

The loans you can get from the桂SBA include:

7(1) loans桂�� This is桂the桂most common SBA loan, 껸꾈삣桂is桂used for桂short- 껸꾈삣桂long-term working capital, purchasing office furniture 껸꾈삣桂supplies, 껸꾈삣桂even refinancing business debt you may already have. The maximum amount that can be桂borrowed is桂a桂whopping $5桂million!

504桂깜늡껸꾈끅桂�� This loan also comes with a桂$5桂million cap 껸꾈삣桂provides a桂fixed rate to桂finance major fixed assets that are used for桂business growth or桂creating jobs. Assets include things like existing buildings or桂land, new facilities, machinery, 껸꾈삣桂equipment.

Microloans桂�� These loans provide up桂to桂$50,000桂to桂help startups launch or桂expand. The average loan is桂about $13,000桂껸꾈삣桂is桂typically used to桂help small businesses expand with working capital, inventory, supplies, furniture, fixtures, equipment, or桂anything else that can enhance the桂business. Microloans cannot, however, be桂used to桂buy real estate or桂refinance existing debt.

The final loan worth mentioning that is桂offered by桂the桂SBA is桂the桂8(a) Business Development program. This program is桂targeted at桂helping small disadvantaged businesses桂�� those that are owned 껸꾈삣桂controlled by桂socially 껸꾈삣桂economically disadvantaged individuals. The goal of桂the桂program is桂to桂help 혫socially 껸꾈삣桂economically disadvantaged entrepreneurs혬 help to桂혫gain a桂foothold in桂government contracting.혬

Unlike other loan programs, this program is桂divided into a桂four-year developmental stage 껸꾈삣桂a桂five-year transition stage. The benefit, however, is桂that businesses that qualify may be桂able to桂receive contracts up桂to桂$4桂million for桂goods 껸꾈삣桂services, 껸꾈삣桂$6.5桂million for桂manufacturing. Not only that but each individual participant, for桂the桂life of桂the桂program, is桂entitled to桂up桂to桂$100桂million in桂contracts!

And as桂if桂that wasn�셳 enough, participants will get specialized business training, counseling, marketing assistance, 껸꾈삣桂even executive development桂�� all provided by桂the桂SBA 껸꾈삣桂its partners. Plus, you may even be桂eligible to桂access surplus government property 껸꾈삣桂supplies, SBA loans, 껸꾈삣桂bonding assistance.

As桂with other programs, you will be桂expected to桂live up桂to桂certain goals 껸꾈삣桂criteria on桂an桂ongoing basis, which the桂SBA will monitor through annual reviews, business planning, 껸꾈삣桂ongoing evaluations.

Startup Business Grants From Private Companies 껸꾈삣桂Nonprofits

Although we桂have been talking about federal 껸꾈삣桂government grants 껸꾈삣桂loans, there are also some great opportunities for桂grants in桂the桂private sector that are worth mentioning.

Many corporations 껸꾈삣桂large nonprofits, like the桂National Association for桂the桂Self-Employed, offer startup business grants or桂organize grant competitions. Some national opportunities include:

Faire Small-Business Grant

If桂you own an桂independent retail store that opened within the桂last year桂�� or桂plan to桂open this year桂�� you may qualify for桂the桂. This new business grant offers $5,000桂in桂Faire credit to桂independent retailers based in桂the桂U.S. The credit can be桂used to桂purchase inventory through Faire.com.

Fast Break for桂Small Business

This is桂funded by桂LegalZoom, the桂NBA, WNBA 껸꾈삣桂NBA G-League 껸꾈삣桂administered by桂Accion Opportunity Fund. You can win a桂$10,000 business grant plus $500桂worth of桂LegalZoom services. To桂qualify, you have to桂be桂a桂U.S.-based business with at桂least three months in桂business.

ZenBusiness Grant Program

The offers $5,000桂each month to桂new businesses that offer products 껸꾈삣桂services that help their communities. To桂qualify, you must be桂at桂least 18桂years old 껸꾈삣桂have used ZenBusiness formation services within the桂last three to桂six months.

Amber Grant for桂Women

WomensNet gives three $10,000 Amber Grants each month 껸꾈삣桂three $25,000桂grants annually. Although startups are eligible for桂all grants, one of桂the桂monthly $10,000桂grants is桂specifically geared toward new businesses. Filling out one application makes you eligible for桂. To桂qualify, businesses must be桂at桂least 50% women-owned 껸꾈삣桂based in桂the桂U.S. or桂Canada.

National Association for桂the桂Self-Employed Growth Grant

When you join NASE, you can apply for桂quarterly . There are no桂time-in-business requirements for桂these grants of桂넵김桂넨늡桂$4,000, but you�셪l need to桂provide details about how you plan to桂use the桂grant 껸꾈삣桂how it桂will help your business grow.

Venmo Small Business Grant

The annual offers $10,000桂grants to桂20桂business owners. This program also provides mentorship from industry leaders 껸꾈삣桂the桂opportunity to桂be桂featured on桂Venmo�셲 social media pages. To桂qualify, you need to桂have a桂U.S. Venmo business account in桂good standing. The business should have less than 10桂employees, less than $50,000桂in桂annual sales 껸꾈삣桂have sold $500桂or桂more in桂goods 껸꾈삣桂services at桂least three months before the桂start of桂the桂grant program.

Tory Burch Foundation Fellows Program

The is桂designed to桂provide funding, education 껸꾈삣桂other resources to桂women-owned startup businesses. To桂qualify for桂this startup grant program, you must be桂a桂women entrepreneur who owns 51% or桂more of桂your business. Your company must have been in桂business ranging from one to桂five years 껸꾈삣桂generates revenue (the program prefers a桂minimum of桂$75,000).

Freed Fellowship Grant

The offers a桂$500桂grant to桂small-business owners each month. All applicants get feedback from the桂Freed Studio 껸꾈삣桂recommendations on桂how to桂grow their business. They also receive two months of桂free mentoring in桂the桂Freed Studio virtual community.

Trust in桂Yourself

So桂what are you waiting for? Check out all of桂these sources of桂federal funding for桂startups, 껸꾈삣桂as桂mentioned, don�셳 forget to桂research programs available in桂your state 껸꾈삣桂locale. The federal government does its best to桂offer free money to桂stimulate small businesses through grant programs, 껸꾈삣桂because there are so桂many programs, much of桂the桂money goes unclaimed each year.

Small business grants can be桂competitive, so桂don�셳 lose hope if桂you don�셳 qualify or桂aren�셳 accepted into a桂program right away. Turn to桂the桂SBA 껸꾈삣桂SBDC in桂your area to桂qualify for桂low-cost, low-interest loans that you can pay back quickly once your business gets off the桂ground. The government trusts you can do桂it桂�� now it�셲 up桂to桂you to桂put in桂the桂work 껸꾈삣桂trust in桂yourself.

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About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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