The honest starting point
Many people search for a grant to start a business. The Small Business Administration (SBA) generally does not provide grants to start or expand a business, and it warns about scams that suggest otherwise. What is available are loans, loan guarantees, free advising and some specific competitive programs.
What is available
| Option | What it is |
|---|---|
| SBA-backed loans and microloans | Loans made by lenders with SBA support, including smaller microloans through intermediaries |
| Free business advising | Counseling through Small Business Development Centers and mentoring organizations |
| Innovation research awards | Competitive programs for small companies doing research and development; check SBIR.gov for current status |
| Local and state programs | Economic development agencies, community lenders and sometimes local grants |
| Private competitions | Pitch contests and corporate grants, usually small and competitive |
Grants versus loans
A grant does not need to be repaid. A loan does, with interest. If you borrow, compare the APR and total cost before you commit. Use the Loan Calculator and read what APR means. Use the Break-Even Calculator to see what sales you would need.
Free help worth using
- Small Business Development Centers (SBDCs) offer free or low-cost advising.
- SCORE offers free mentoring from experienced business people.
- Local libraries and chambers of commerce often host workshops.
Before you borrow or apply
- Write a simple plan with startup costs and monthly expenses.
- Estimate break-even and a realistic runway.
- Keep personal and business finances separate.
- Check any offer on SBA.gov before paying anyone.
Scam alert
Be wary of anyone who says they can guarantee you a grant for a fee, who contacts you unexpectedly with a "pre-approved" award, or who asks for payment through unusual methods. Free official help exists, so you should not have to pay for referrals.
Common questions
Does the SBA give grants to start a business?
Generally no. The SBA offers loan programs and free counseling, and warns about scams promising grants.
Are there any grants for small businesses?
Some exist, such as competitive research awards and local or private programs, but they are limited and competitive.
Where can I get free business help?
Small Business Development Centers and SCORE provide free or low-cost advising.
What is a microloan?
A small loan, often for startups or small businesses, made through intermediary lenders in SBA programs.