Federal Grants and Loans for Small Businesses -1
The only small businesses eligible for a US Federal Grant is a 501C charitable non-profit agency. The Federal government does not typically award grants to for-profit small businesses. You may find some grants through developmental agencies provided by your state.
What Type of Federal Grants Are Available
Generally the federal government will offer project grants for medical research or other
varieties of research projects. There are some grants available where you are required to have matching funds to fill a very specific purpose. There are also block grants available, where the government provides a chunk of money to an agency that will divvy them up to those who qualify for the monies. For instance women in business are often served by one of these non-profit agencies that get a block grant.
There are still occasional earmark grants available; however these have fallen out of favor in the last few years. An earmark grant is money appropriated by a specific member of congress and handed out without having to seek bids for the use of the monies.
The important thing to note is that while the federal government does have some grants available, they aren’t for small businesses unless you are a non-profit 501C charitable organization.
For more information on Federal Grants, see here.
Other Federal Resources
While your small business won’t be getting a federal grant, make sure you check out other resources. Qualified small businesses may be able to work with the US Small Business Administration or SBA for help to start, grow, and maintain a small business. Created in 1953 the SBA offers programs for loans, surety bonds, and venture capital to those from the United States, including the American territories of American Samoa, Puerto Rico, Guam, and the U.S. Virgin Islands. These aren’t grants, but loans and venture capital options.
Usually the loans arranged by the SBA aren’t from governmental loans. The government just serves as a guarantor of the loan; they don’t lend the money to small businesses. The SBA will work with lending companies to procure money that the government will promise to pay back if the person getting the loan defaults. Then the money is awarded to those small businesses that qualify for the loan and that the passed the SBA or lending institution approval process on the business plan for your venture.
Having the government guarantee the loan makes it easier for small businesses to get the money they need to start a business or expand their business. Below you will find some information on programs the SBA supports and manages.
