Small Business Grants

Small businesses seek business grants funding for a variety of reasons including start-up, expansion, and workforce development. Business grants are available for small businesses from several sources.  The most common source is government small business grant.

Federal government grants are primarily for research and development activities.  The Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) grant programs are two of the best sources for government small business grants.  These grants are available from just about every federal agency or department.

SBIR/STTR grants are specifically to help businesses bring innovative ideas to market.  Ideas may include technology or other cutting edge processes.  Government small business grants are awarded in phases.  The initial phase is for the research and prototype development of the concept.  Even if the idea does not work out, small businesses do not have to repay the grant funds.  As long as they have conducted activities as detailed in their proposal, they have met their business grants requirements.

The second phase offers substantially more funds, nearly $1 million for some agencies, to fully develop the concept and commercialize it.  Projects that make it to the second phase of funding are typically those with wider impact and greater use to the country as a whole.  Some projects may be eligible for a third round of grant funding to test different applications of the concept or resulting technology.

Research grants for small business are available through other programs administered by the National Science Foundation (NSF) and the National Institutes of Health (NIH).  These grant programs have detailed outcomes that small businesses must agree to fulfill. They are less discretionary in approach than the SBIR/STTR programs.

The National Institute of Standards and Technology (NIST) also provides several grant opportunities for small businesses.  These focus entirely on uses of technology including new applications of older technology.  Grants for small business are usually available only once a year from NIST programs.

Small business grants are available from state and local governments.  State governments offer grants for small business activities that focus on technology or other skilled areas.  The innovation the small businesses bring to the table is critical for state growth.  In fact, states may fund regional business incubators that offer grants for small business for projects that address local needs.  These can include new manufacturing processes or technology uses that promote workforce development activities supported by the state.

There are multiple avenues for small businesses to obtain small business grant funding.  It is important that small businesses meet all eligibility and program requirements when applying for small business grant.  Once awarded, grants are no different than other contractual obligations.