How to Get Government Grants to Start a Business

By Jill Gardiner , last updated June 23, 2011

If you’re thinking about starting a business, you may be considering applying for a government grant. While many grants are available at both the federal and state level, they’re not as easy to get as one might hope. The requirements to qualify for a grant are strict, narrow, and not what you might think. Don’t despair, however, there are still many resources available from the government for the small business start-up.

Federal Government

Contrary to popular belief, the federal government does not offer grants to small businesses that are for profit, even if the business is owned by a minority or a woman. They do offer grants for non-profit and educational agencies. The federal government also provides research grants to business in areas such as energy, health, science, education, and transportation. For-profit companies can, however, apply for small business loans to either start or expand their business or find information on possible venture capital options. On the federal government’s website, they also provide numerous resources, such as guidance for writing business plans and access to business mentoring and counseling agencies. To find out if you qualify for a grant from the federal government, fill out the form located on their website.

State and Local Governments

The federal government does provide grants to state and local governments for small businesses, but the small businesses generally have to meet certain criteria (set by the state or local government) to qualify for them. Businesses that will be located in an urban district, for instance, or a town that’s included in a renewal or revitalization project may be eligible. Businesses that can demonstrate an ability to create significant jobs or to attract new residents are also more likely to qualify. State and local governments also offer small business loans, as well as resources to help plan and start your business. A list of links to all state government and U.S. territory websites can easily be found on the web.

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