10 Best Grants for Small Business Startups

How is a startup different from a small business?

The terms "small business" and "startup" are sometimes used interchangeably, but they’re different in terms of growth strategies, goals, and funding.

A startup is a company in early development designed to be an industry disruptor. Its goal is to create an innovative way to offer a product or service while quickly growing in size, influence, and market share. Outside investors typically provide funding to startups, but they can also receive funding from grant programs through government agencies, private companies, or nonprofits.

Like startups, small businesses rely on a variety of funding opportunities. However, their aim is different. Unlike startups, they are already established, prioritize long-term stability, and are less likely to seek quick expansion or high-risk strategies.

Types of small business grants

Small business grants come in various types; each is designed to support specific industries, demographics, or business goals. Grant awards allow startups and small businesses to launch or grow operations without increasing debt, as they usually do not have to be paid back. Depending on the grant program, eligible applicants may need to meet specific criteria, including requirements for how the money can be used.

Federal business grants

Federal grants are funds awarded by federal agencies, such as the Small Business Administration (SBA), which offers multiple grants to small business owners, including the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These are both examples of research and development grants offered through the federal government. 

The USDA's Rural Development Business Program is another example of a federal grant. It provides technical assistance and financial support to promote business growth in rural communities. 

Federal grant funding helps businesses achieve specific development objectives, stimulate economic growth, or address policy goals. These grants are highly competitive and typically come with a great deal of oversight—but they can also be highly lucrative and prestigious.

State business grants

A state business grant is much like a federal grant but from state agencies. Funding is usually targeted at industries or initiatives that align with a particular state's economic development initiatives.

Research and development grants

Research and development (R&D) grants funding to businesses and institutions, like universities, hospitals, for-profit organizations, and other entities engaging in research activities for new products, services, and advancements in their field. Private foundations, nonprofits, and government agencies are just some donors providing R&D grants.

Nonprofit and community development grants

This grant funding supports nonprofits that address community cultural, educational, environmental, and social needs. It may focus on initiatives like neighborhood revitalization, social services, economic empowerment programs, and housing development.

Industry-specific grants

This type of grant funding is designed to support industry-specific projects or initiatives in sectors like healthcare, technology, or manufacturing. Grant opportunities are provided by trade associations, private foundations and government agencies to promote growth and innovation within a particular field.

Private business grants

Private organizations, like foundations or corporations, give grant money to small businesses that align with their goals or ideals.

10 of the best small business startup grants in 2025

Below are some of the best small business startup grants available in 2025 that support and promote entrepreneurship.

Tory Burch Foundation Fellowship

Fifty women-owned businesses can receive up to $5,000 in grant money and 0% interest Kiva loans with help from the Tory Burch Foundation. Grant recipients can also participate in coaching sessions and workshops via the foundation's year-long program. Winners are selected sometime in the spring, and courses begin in the summer. The application window has not yet been announced for 2025.

Freed Fellowship Grant

Businesses owned by women or people of color can receive funding through the Freed Fellowship. It offers monthly micro-grants of $500 and may win an additional $2,500 at the end of the year. Applicants also receive two months of business mentorship at no cost. Applications are accepted on a rolling basis.

Awesome Foundation Grants

The Awesome Foundation is one of the few awards with no actual requirements other than being "awesome" and completing the application form. Anyone—individuals, groups, and organizations—can apply.

The foundation considers eligible projects that bring a positive and creative change to the community. The Awesome Foundation awards micro-grants of $1,000. Applications are submitted online or through local chapters.

Hiring Our Heroes’ Small Business Grant Program

Is your business veteran-owned? Servicemembers and their spouses can receive up to $10,000 through the Hiring Our Heroes grant program. An eligible business must be majority owned by a veteran or their spouse, have between three and 20 employees, and demonstrate financial hardship or need. Applications are open until February 15, 2025.

Wish Local Empowerment Program

Black small business owners can receive a maximum grant of up to $2,000 through the Wish Local Empowerment grant program. Eligible applicants must join Wish Local, be at least 18 years old, own a business with 20 or fewer employees, have a U.S.-based brick-and-mortar location, and generate less than $1 million annually. Wish Local accepts applications on a rolling basis.

National Association for Self-Employed (NASE)

There are several organizations that provide grants for self-employed business owners, and NASE is one the most well-known. It awards a maximum grant of $4,000 through its Growth Grants program to four small businesses, which can be used for various business expenses. Grant applications are reviewed each quarter.

Annual NASE members, veteran members, silver members paying annually, and gold members can apply anytime. Monthly members and silver members paying monthly can apply if they are members in good standing for a minimum of 90 days.

Los Angeles Area Chamber of Commerce Foundation

A great example of local-level grant programs comes from the LA Area Chamber of Commerce, which has created its Small Business Disaster Recovery Fund for local businesses impacted by the 2025 wildfires. Grant awards range from $5,000 to $10,000, with webinars to give business owners essential resources and recovery strategies.

FedEx® Small Business Grants Program

Created in 2012, the FedEx® Small Business Grant Program offers ten annual grants to businesses, with one $50,000 grand prize and $20,000 awards to the other nine. Eligible applicants must be U.S.-based for-profit business owners who ship through FedEx®. Businesses can register for notifications about the next application period, which is currently closed.

Etsy Emergency Relief Fund

If you're an Etsy seller in a federally declared disaster area, you can apply for a small business grant via its Emergency Relief Fund. Awards of up to $2,000 are available to eligible applicants.

Sellers must have suffered a federally declared natural disaster that Etsy describes as an "unforeseen natural event that has significantly and adversely affected a seller's ability to produce and/or market their work, that has created an immediate need for relief funds and/or assistance." Sellers must be active in the marketplace for at least one year and be in good standing. Etsy accepts applications on a rolling basis. 

Restaurant Disaster Relief Fund

Food businesses that need financial help can get it via the small business platform Hello Alice, which has teamed up with DoorDash to support eateries impacted by natural disasters. Only restaurants, bakeries, or gastropubs with U.S. brick-and-mortar locations can apply if they have experienced lost revenue in the past 12 months due to a natural disaster, significant weather event, or infrastructure failure. The grant award is $10,000, and Hello Alice accepts applications on a rolling basis.

How to apply for a small business grant programs

Below is a step-by-step guide for applying for a small business grant.

Step 1: Create a list of relevant grants

There's a grant for nearly everyone, from women-owned small businesses to businesses in rural communities. To find grant programs that best suit your needs, you'll need to do some research. The application process can take time, and there's no guarantee you'll win an award, even if you're eligible. Apply for several funding opportunities to increase your chance of success. 

Step 2: Double-check eligibility criteria

Review your business's characteristics to ensure they meet the criteria for your chosen grants. Industry, size, location of your business, ownership demographics, and community impact are all factors that may affect your eligibility.

Step 3: Prepare the required documentation

Make a list of the documents you'll need when applying. The donor organization may ask for copies of your tax returns, bank statements, business plan, a list of board and key staff members, and your EIN, among other items. Collecting these items can take considerable time, so don't wait until the last minute to get them together.

Step 4: Tell your business' story

Craft a compelling story for the donor. Highlight how your business started, the challenges you're addressing now, and the positive impact your company will have on the community.

Step 5: Submit your application

Review your application and documents before submission, and take note any special requests or submission instructions in advance. Make sure to submit everything before the deadline.

Step 6: Follow up (if necessary)

The grant review process is different for every small business owner. You should get a confirmation of receipt after submitting your grant application—if not, you can send a follow-up email requesting confirmation.

Grant organizations typically receive many applicants and may not respond promptly, but they usually follow up with an announcement about when recipients will be announced after the application deadline.

H2: Business grant vs. business loan: How are they different?

The main difference between a grant and a loan is that grants are "free money," meaning they are not repaid. Private institutions, nonprofit organizations, and government agencies at the local, state, and federal levels award grant money to eligible small businesses. To receive grant funding, business owners must meet the granting party's eligibility requirements and use the funds offered for the reasons it specifies.

Loans can come from online lenders, traditional banks, credit unions, and the Small Business Administration (SBA). This temporary funding is given to small businesses with the caveat that it is paid back with interest over time, usually between 5 to 10 years.

H2: FAQs

What are some other types of funding for startups?

Grant programs are not the only way a business can get financial assistance. Loans, crowdfunding, angel investors, venture capital, credit lines and bootstrapping (self-funding or funding through friends and family) are other resources you can use to obtain funding for your small business.

Do you have to pay a small business grant back?

Grant awards are considered "free aid," however, the grant donor typically requires they be used for a specific purpose. They are unlike small business loans, which need to be paid back.

How much is the average small business grant?

Grant awards for small businesses range between $10,000 and $50,000. The exact amount depends on the specific funding source and grant purpose.

H3: Is a small business grant taxable?

The majority of grants are considered taxable income. Small business owners pay taxes on the funding they receive. This is deducted from the total amount of the grant. However, some grant types are not taxable, including those given to nonprofit organizations and federally recognized American Indian tribes.

H3: What can a small business grant be used for?

A small business grant can be used for a variety of business operating expenses, including hiring employees, upgrading facilities, purchasing inventory or equipment, marketing initiatives, or product development.