- Starting a business
- Paying off business or personal debts
- Covering business operating expenses
Federal SBIR Program R&D Grants
Businesses involved in scientific research and development (R&D) may be eligible for federal grants under the Small Business Innovation Research (SBIR) program. SBIR grants can generally be used only to fund the R&D efforts of qualifying businesses to help them develop and market innovative technological products.
Just like most federal grants, SBIR grants are awarded on a "competitive basis," with potentially hundreds of businesses competing for the same grants. As a result, the application process itself can involve sizeable expenditures of money and time.
State Government Grants
Similar to federal SBIR grants, state government agencies sometimes offer "discretionary incentive grants" to businesses that, in the agencies' opinion, help stimulate the state's or region's economy and advance beneficial causes such as alternative energy development. However - as the SBA points out - the stringent eligibility requirements for these state government grants often target larger employers and prevent many smaller businesses from successfully competing for them.
Finding the Grants
By far the fastest, easiest and most comprehensive method of finding small business grants, loans and other financing options offered by both the federal and state governments is to use the SBA Loans and Grants Search Tool.
Note that when using the SBA Loans and Grants Search Tool, it is not necessary to select a specific industry from the search criteria list. In fact, if you leave all of the selection criteria blank and simply select a state, the tool will show you all grants, loans and other financing opportunities available to all types of businesses in the specified state.
The Business Grants Bottom Line
In the words of the SBA, "if you are seeking 'free money' to launch or expand your business, forget about it." Not only are government business grants difficult and often expensive to apply for, the governments awarding them typically demand some return on their taxpayers' investment. Businesses getting these grants are strictly required to perform as promised by developing and selling new technology and benefiting the regional economy.
As the SBA recommends, most small businesses or potential small business owners with a good business plan, a viable market, a great product or service, and a passion to succeed, are far better off seeking small business loans than government grants.