Despite the hype of those who market books and services on "how to get a free federal grant to start and grow your small business," there are no federal government programs called "small business grants."
The U.S. Small Business Administration DOES NOT offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. While the SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.
However, U.S. Government agencies do award hundreds of millions of dollars in grants for specific services, research and programs. For specific small businesses in specific fields and industries, these grants can be a signicant source of funding. For companies in specific niches in such fields as housing, transportation, energy, security, education and other industries, a wide array of grant programs may be available. Also some federal grants target businesses owned and operated by women and minorities. A significant source of seed money for technology companies is the Small Business Innovation Research program, or SBIR. However, this program provides funding for research and development, not for incorporation, sales, marketing or other startup costs.
Some business grants are available through state and local programs, non-profit organizations and other groups. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. The amount of the grant money available varies with each business and each grantor.
If you are not one of these specialized business, both federal and state government agencies provide financial assistance programs that helps small business owners obtain low-interest loans and venture capital financing from commercial lenders
