10 Best Small Business Grants in Colorado

How do small business grants work?

Small business grants provide funding to small business owners who may need assistance starting their business or growing an existing one. Some small business grants allow business owners to use the money however they choose, but most carry restrictions for what the grant may be used for. If a business owner uses the funding for a purpose other than the one specified by the grant, they could be subject to penalties or even have to give the money back.

Types of small business grants

Grants for small businesses come from many different sources, from federal agencies to private corporations. While the below list is by no means exhaustive, it represents some of the more common places small business owners often look when searching for available funding.

Federal grants

Government grants are available from federal agencies such as the Department of Agriculture, the Department of Education, and the Department of Veterans Affairs. You can search for federal grant opportunities at grants.gov. 

Many business owners also look to the U.S. Small Business Administration (USBA) for funding opportunities. However, it’s important to note that the SBA’s business grants are limited to a few defined purposes. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs (STTR) are two of the most well-known. These are research and development grants that are available only to businesses that engage in scientific research, and the grant funds they provide must be used for that purpose.

The SBA also offers grants through its State Trade Expansion Program (STEP), which is designed to aid first-time exporters of goods. And, the agency also offers community organization grants designed to provide financial assistance to certain demographic groups. Women-owned, veteran-owned, and minority-owned businesses may want to start by looking for opportunities here. 

SBA grants may only be used for the purpose of expanding a business and cannot be used to fund costs associated with starting a business.

State grants

State government agencies may also have funding opportunities available to business owners in the state. Here are a few resources you can use to search for Colorado-specific granting opportunities:

• The Colorado Office of Economic Development & International Trade (OEDIT): OEDIT provides access to resources designed to help promote business growth and a sustainable job market throughout Colorado. Business owners can search for programs and filter by industry and type of funding to find grants that may be a good fit.
• U.S. Economic Development Administration (EDA). Business owners can search an online directory for Colorado-specific funding resources, including grants and small business loan opportunities.
• Colorado Small Business Development Center Network (CSBDC): The CSBDC is a valuable resource for Colorado businesses, providing training opportunities, consulting services, and help with locating funding opportunities. It operates 15 full time and 70 part time centers throughout the state.

Private grants

Colorado businesses can also try searching for funding opportunities from corporations and private foundations. These grant opportunities could be industry-specific, or they could provide funding for specific groups like women business owners. If you identify as a member of a particular community, you could try doing a general search for small business grants targeting business owners in your demographic.

10 best small business grants in Colorado

Colorado Community Business Preservation Program

This grant program is unique in that it seeks to provide funding to not one but groups of up to six culturally significant businesses that are located in the same area and are in danger of displacement. To qualify, businesses must identify a sponsoring entity—such as a government agency or nonprofit organization—that is willing to manage and distribute funds, and the businesses and potential sponsors will complete the application process together. Award amounts vary between $10,000 and $30,000 per business, and the money may be used for a variety of purposes, such as building improvements, licensing fees, and hiring contract work. 

Interested businesses can find more information on the OEDIT website.

Community Food Access Grant

Offered through the Colorado Department of Agriculture, this grant seeks to promote access to affordable, healthy food in low-income areas by providing aid to small food retailers and small family farms. The maximum grant amount available through this program is $50,000 per business, and the funding may be used to cover equipment purchases or general operating expenses.

Skill Advance Colorado

Skill Advance Colorado’s grant programs are offered in partnership with the Colorado Community College System and are intended to support the hiring and training of employees in existing Colorado businesses or new businesses that are starting or expanding into the state for the first time. Funding amounts vary based on the number of workers receiving training. Interested Colorado businesses can fill out the application online or contact a college representative for more information.

Colorado Springs Downtown Development Authority Grants

The city of Colorado Springs offers a number of grant programs designed to promote economic development in its downtown area. Separate grant opportunities are available for small businesses looking to make exterior improvements to a building, new business owners looking to establish a presence downtown, and businesses in need of emergency relief, to name just a few. Interested parties can peruse the full list of available grants and requirements on the Downtown Colorado Springs website. 

WomensNet Amber Grant

WomensNet grants $10,000 in funding to women-owned businesses every single month. These grants are available to businesses in all 50 states, making competition tough. But there’s an extra incentive to apply: All of the grant winners from the previous year are eligible to receive one of three additional $25,000 grants offered at the end of the year. The application process is also relatively simple and asks applicants to speak from the heart about their business and how the money could help them succeed.

Colorado Enterprise Fund Grants

The Colorado Enterprise Fund’s primary focus is to connect small businesses with loan programs that may not be available through traditional lenders. But they also offer a number of different grant programs that support small businesses in communities across Colorado. Interested businesses should check the website regularly for updated lists of available grant programs supported by CEF. 

Cannabis Business Grant

Designed to promote social equity, innovation, and job creation across the marijuana industry, this grant awards eligible businesses with up to $25,000 in funding, but requires that businesses make a matching donation up to a certain percentage. Potential grant recipients can find more information on the Cannabis Business Grant page of the OEDIT website. The application window is usually Oct. 1-31.

Colorado State Trade Expansion Program (STEP) Grant

The STEP grant helps Colorado businesses expand into an international market for the first time by awarding up to $10,000 in funding. Grant awards must be applied to activities related to development and international trade, such as attending trade shows, international market research, and compliance testing. Check the website for a full list of eligible uses and application requirements.

Advanced Industries Export Grant

Similar to the STEP grant above, this grant aims to help small businesses with exporting costs. But it is specifically designed to aid technology-focused companies (referred to here as advanced industries) that have 200 employees or less. If selected, grant recipients could receive up to $15,000, and may have up to 50% of eligible expenses reimbursed. 

Rural Jump-Start program

This grant, which is a collaborative effort between state and local governments and supporting agencies, is designed to encourage economic growth in rural Colorado. Small businesses opening in rural or distressed areas of the state could qualify for up to $40,000 in funding, plus up to an additional $5,000 per new hire, and will also be eligible for special tax relief benefits through the program. Interested businesses should check the website for more information on what qualifies as a Rural Jump-Start Zone before applying.

How to apply for a small business grant

Grant programs can have different requirements: some may only ask you to fill out a simple form, while others may require you to attend interviews or write a letter outlining your business goals and its mission. Staying organized when applying for grants and following a process similar to the one below may keep you from feeling overwhelmed.

Step 1: Make a list of your grants and their requirements

With so many grant opportunities out there, it can be difficult to keep track of all the ones you may want to apply for. Keeping a list, or even a spreadsheet, with information on each grant, the agency offering it, its requirements, and due dates could be a good idea.

You may also want to include a note about any restrictions that may come with the grant money. You’ll need to follow these guidelines to the letter after you receive your funding, so making note of it now can help you make a plan for how you’ll use the money if you’re lucky enough to receive it.

Step 2: Gather your documents

Again, some grants may only require you to fill out a simple application form. But in many instances, you may be required to provide detailed information such as tax statements or evidence of military service (for veteran-owned businesses). It can be a good idea to have copies of these documents on hand in case they’re asked for at any point in the application process. 

Step 3: Tell your business's story

While some grants may require you to do nothing more than fill out a simple application to be considered for funding, others may request more personal information. This might include a mission statement about your business or a detailed explanation of what you plan to use the grant funds for. In such instances, a thoughtful, well-worded statement of purpose could play a pivotal role in whether you receive your funding or not, so be sure to give it the time it deserves. 

Step 4: Submit your application

If you’re applying for funding online, be sure to submit your application and upload relevant materials before the deadline. If you’re applying by mail, be sure you allow extra time for your application to arrive. Some grant agencies may accept applications that are postmarked by the deadline, but be sure to read the requirements carefully to make sure.

Step 5: Be prepared to follow up

In some cases, you may only need to wait to hear back from the grant-issuing agency to see if your application for funding was accepted. However, many grants are highly competitive and may require business owners to advance through several application stages. If you apply and don’t hear back, it can be a good idea to reach out to be certain your application was received. You may also want to double-check your email folders to make certain you didn’t miss a reply that was incorrectly marked as spam.

What’s the difference between a business grant and business loan? 

Both business grants and business loans can provide you with necessary funding for your business, but they each come with their own pros and cons.

Business loans typically don’t come with the same restrictions as business grants do, which allows you much more flexibility on how you use the money. And because business grants can be so competitive, your chances of getting approved for a business loan might be greater.

However, while a business grant usually doesn’t need to be paid back, a business loan certainly does—and with interest. And, when you take out a business loan, you may be required to sign a personal guarantee, which makes you liable for paying the money back if your business defaults on the loan. This level of personal liability may make a business loan less favorable to some. 

FAQs

What other types of small business funding might be available to me?

Loans and grants aren’t the only small business funding options available to you. You could consider seeking out investors for your business or even consider crowdfunding on a site like Kickstarter. If you have friends or family who are willing to make a personal investment in your business, you could also consider asking them for a monetary gift. One of the benefits of going this route is that you won’t have to pay taxes on gift money as long as the amount is under $15,000.

And, of course, you always have the option to self-fund your business. If you have a considerable amount of savings, this could be an appealing option since you won’t need to pay interest on your own money, but it does put your personal savings at risk if your business fails. 

Are small business grants taxable?

Unless your small business is a tax-exempt entity like a charitable organization, you will have to pay taxes on any grant money you receive. However, the IRS does allow for certain exceptions to the rule, which may be tied to the specific objective of the grant. If you’re unsure whether you need to pay taxes on a small business grant, it can be a good idea to consult a tax professional for expert advice. 

Do you have to pay a small business grant back?

One of the most appealing parts of receiving a grant award is that the money does not need to be repaid. However, it’s important to remember that your grant likely comes with restrictions on what you can use the money for. To avoid having to give the money back, you should make sure you understand the terms of your grant and use the money only for its defined purpose.

What can a small business grant be used for?

Many small business owners may hope to use a grant to help them pay for day-to-day expenses, but the terms of your grant award will likely limit your use of the money to specific purposes. If you want more flexibility, consider a different type of small business funding, such as a loan.