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Small Business Grants

The U.S. Federal Government generally does not give grants to for-profit small businesses. If your business is not a 501C3 non-profit organization, it is not eligible for federal grants. However, there are other federal resources available for small businesses.

Small Business Administration (SBA)

The SBA, created in 1953, helps Americans start, build, and grow businesses. It operates in the United States, American Samoa, Puerto Rico, the U.S. Virgin Islands, and Guam. While the SBA doesn’t give grants to start or expand businesses, it offers loans, surety bonds, and venture capital programs.

SBA Loan Programs

  • Basic 7(a) Loan Program: Provides funds for working capital, machinery, equipment, furniture, fixtures, land, buildings, leasehold improvements, and debt refinancing. Loan terms are up to 10 years for working capital and 25 years for fixed assets. It targets start-ups and existing small businesses.
  • 504 Loan Program: Offers long-term, fixed-rate financing for buying real estate, machinery, or equipment for expansion or modernization. These loans are provided through a Certified Development Company (CDC) with borrower equity of 10%.
  • Microloan 7(m) Loan Program: Provides short-term loans up to $35,000 for working capital, inventory, supplies, furniture, fixtures, machinery, or equipment. Not for real estate or debt repayment. Loans are given by intermediaries experienced in lending and technical assistance.
  • Loan Prequalification: Allows businesses to have loan applications of $250,000 or less reviewed and possibly approved by the SBA before approaching lenders.

Surety Bond Guarantee Program (SBG)

The SBA helps small businesses obtain surety bonds, a type of insurance that protects project owners if a contractor cannot complete a project. The SBA guarantees these bonds through surety companies.

Venture Capital

The SBA helps small businesses obtain venture capital through the New Markets Venture Capital program (NMVC). This program, in partnership with private investors, targets small businesses in low-income areas. To qualify, the business must be worth less than $6 million and have a profit of less than $2 million in the past two years, and be located in a qualifying low-income area.

Exceptions: Innovation and Technology Grants

The SBA has exceptions to the no-grant rule for innovation and high-tech companies:

  • Small Business Innovation Research Program (SBIR): A competitive program that funds the startup and commercial development of innovative technologies, products, or services.
  • Small Business Technology Transfer Program (STTR): Another competitive program that funds businesses partnering with non-profit research institutions to commercialize technology products.

For more information on available assistance, visit the Small Business Administration website.