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Everything To Know About
Small Business Grants and More

What Are Small Business Grants?

Small Business Grant Recipients
Pictured with First Lady Laura Bush,
three Afghan women are the recipients
of a small business grant from the
Women's Business Council.

Grants in general are free money. They are available to provide financial assistance for a variety of reasons, such as to pay for college, assist in the launch of a non-profit organization, conduct research, or even rebuild a community.

Small business grants, however, are specifically designed to help start a new business or expand an existing one. The amount of the funding can vary from as little as $500 to as much as $5 million. Grant funding is often available to further the growth and development of small businesses - thus the term "Small Business Grants." Other grants were created to assist disadvantaged minority businesses - thus the term "Minority Business Grants."

Such grant funding essentially provides the money (fully or partially) that an applying entrepreneur need not consider as a part of his or her own risk. In other words, it’s completely risk free. The amount granted does not have to be repaid. This is much different than a business loan, which does require repayment with interest.

It is important to note that the federal government does not provide grants for starting and expanding a business. Grants from the federal government are only available to non-commercial organizations, such as non-profits and educational institutions in areas such as, medicine, education, and scientific research and technology development. The federal government also provides grants to state and local governments to assist them with economic development.  

If you are a small business owner, you can search for grants by state at Small Business Loans and Grants Search Tool to find specialized small business grant programs.

These specialized small business grant programs will outline the specific business objectives that must be met in order to qualify for the grant money.  For example, some opportunities require that the project or business for which you are requesting funds cannot already be in existence. Others may require that the applicant must have 5-10 years of business experience. The rules and regulations depend upon the corporation, organization, or government agency that is providing the funds.

Small Business Grant Funding Process

In addition, although you are not required to repay this money, there are tasks that the applicant is required to perform. Many times these tasks can be quite tedious. For instance, the grant recipient is almost always required to keep very detailed records as to how the funds are allocated.  In addition, the recipient will need to prove that the finances were used within the time frame allotted by the distributors of the grant at the time it is awarded.

Business grants can prove to be very useful for small business or minority business operations.  But the process of applying for business grants can often take months and require a great deal of paperwork, including long applications and detailed documentation.  For small business owners who are in it for the long haul, however, it may be a small price to pay for the financial assistance that grants provide in order to sustain and grow your business. 



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