How to find free grants to start a business in 2026

Launching a business takes more than a great idea; it requires capital. Without it, many entrepreneurs struggle to afford essential startup costs, such as equipment, licensing, marketing, and hiring. 

To get funded, business grants offer a valuable alternative. These funds don’t require repayment and can help new founders move forward with confidence. However, finding the right grant programs takes time and strategy. 

Entrepreneurs must know where to look, what to expect, and how to apply. This article explores where and how to find free grants for startups. We’ll cover trusted sources, eligibility basics, and tips to stand out in a competitive application process. 

Whether launching a small shop or scaling an innovative idea, founders can use this guide to identify real opportunities and access free grants to start a business in the year ahead.

What are business grants?

Business grants are non-repayable funds awarded to entrepreneurs or companies for specific purposes. These grants often come from government agencies, nonprofit organizations, or private institutions aiming to support economic growth, innovation, or underserved communities. 

Startups may use grants to cover early-stage expenses, such as equipment or marketing, while established businesses might apply them toward expansion, research, or workforce training.

Unlike loans or credit cards, business grants do not require repayment, do not add debt, and have no interest or lender fees. They also don’t affect a business’s credit score.

However, grant money usually comes with strict conditions. 

Recipients must use the funds in accordance with the terms outlined in the agreement. Spending outside the approved scope or failing to meet reporting requirements can result in penalties or disqualification from future funding.

For many small businesses, grants offer a powerful way to access funding without incurring financial risk or obligations.

2 types of free grants to start a business

Starting a business takes resources, and for many entrepreneurs, free grants offer a practical way to secure funding without debt.

Knowing and understanding the types of grants available can make the search more efficient and focused:

1. Government grants

Federal, state, or local agencies provide government grants. These are often designed to support specific industries, locations, or underrepresented groups. 

Entrepreneurs can find them through official databases, though the platforms are often outdated or difficult to navigate. Application processes may be time-consuming, but the funding amounts can be significant.

2. Private grants

Private grants come from corporations or charitable foundations. Companies may offer grant programs to support small businesses, especially those aligned with their values or industry. 

Foundations also fund startups through community-focused or innovation-driven initiatives. These grants often have simpler applications but face heavier competition due to limited spots and higher visibility.

Both options offer real opportunities if you know where to look.

How to apply for free grants to start a business

Applying for free grants takes more than filling out a form, as it requires time, research, and a focused approach. Many business owners skip the process due to the effort involved, but a strong application can lead to real funding without incurring debt. 

Here’s how to get started:

• Find the right grants. Search for grants that match your business stage, industry, and location. Pay attention to eligibility details before spending time on an application.
  
• Check the requirements carefully. Review every condition. If a grant requires your business to be two years old and you’ve only been open for one, move on. Misapplying wastes time.
  
• Complete every section accurately. Answer all questions clearly and truthfully. Incomplete or vague applications often get rejected early in the review process.
  
• Follow the instructions exactly. Stick to page limits, file formats, and deadlines. Small mistakes can disqualify an otherwise strong submission.
  
• Contact the grant officer. Reach out to ask questions about the process. Understanding what the reviewer values can help shape a better, more targeted application.

A well-prepared grant application increases your chances of receiving funding.

How to win free grants to start a business

Finding the right grant is only half the challenge, standing out is what gets your application noticed. Here are important tips to improve your chances of being selected:

• Study successful applications. Reach out to previous winners of the grant you’re applying for. Ask how they approached the process and what helped them stand out.
  
• Write a strong business plan. A detailed, realistic plan is often required. Highlight how your business will grow, how the grant money will be used, and how your goals align with the grant’s purpose.
  
• Tailor your application. Avoid generic answers. Speak directly to the values and goals of the grant provider using specific examples from your business.
  
• Follow up professionally. After submitting, check in with the grant officer politely. Ask if anything is unclear or if additional information is needed.

A thoughtful, personalized approach can help your application rise to the top.

Where to get free grants to start a business

Obtaining free grants to start a business often requires digging through multiple sources and matching opportunities to your business type and location. 

Below, we have listed four major categories of grant sources, with sample programs to help narrow your search:

1. Federal small business grants

Government agencies often fund grants in areas like research, innovation, conservation, or public interest projects. These grants rarely cover general start-up operating costs, but they can support development, R&D, or sector-specific innovation initiatives:

• Grants.gov – The central U.S. portal for federal grant opportunities. Filter by “small business” to see relevant open calls.
  
• Challenge.gov – This official government website hosts federal prize competitions and challenges. Entrepreneurs can participate in contests tied to technical or societal goals.
  
• Small Business Innovation Research (SBIR) – A competitive program focused on high‑tech research and commercialization. Eligible small for-profit firms (typically with fewer than 500 employees) can apply for phased awards on SBIR.
  
• Small Business Technology Transfer (STTR) – Similar to SBIR, but requires collaboration with a nonprofit research institution in early phases.

Agencies such as the Department of Energy or Department of Defense also run SBIR/STTR programs in specific technology domains.

2. State grants for small businesses

Federal grants are limited and often highly competitive. This is why many states or local governments also run their own grant or incentive programs aimed at local economic development, community growth, or sector-specific support:

• State Economic Development Agencies / EDA offices – State branches of agencies help fund small business growth, infrastructure, or job creation.
  
• State Business Incentives Database – A database of incentive and grant programs by state, created for economic development professionals.
  
• Small Business Development Centers (SBDCs) – These local centers often help business owners identify state and local grants and provide guidance on applying.
  
• Regional or municipal grants – City or county governments may offer small business grants tied to revitalization zones, industry clusters, or targeted neighborhoods.

3. Corporate small business grants

Corporations and business-oriented organizations sometimes run grant contests or programs to support entrepreneurship, innovation, or social impact:

• FedEx Small Business Grant Contest – Offers a top prize (e.g. $50,000) plus smaller grants. Applicants typically need to have been in operation for a minimum period and meet employee thresholds.
  
• Visa Everywhere Initiative – A global innovation program where businesses solve commerce/payment challenges; finalists can receive funding or support.
  
• National Association for the Self-Employed (NASE) – Offers small monthly grants (for example, up to $4,000) to its members.
  
• Nav Quarterly Business Grant – Awards a $10,000 grant each quarter to a small business, plus smaller prizes for runners‑up.
  
• Patagonia Corporate Grant Program – Focuses on environmental or sustainability mission projects (often for non‑profits, but occasionally applicable to mission‑aligned businesses).

4. Grants for demographic‑specific small businesses

Many grant programs target historically underrepresented entrepreneurs or specific groups, such as women, veterans, minorities, or rural business owners.

• Eileen Fisher Women‑Owned Business Grant – Awards funding to women-owners meeting criteria in revenue, impact, and social or environmental mission.
  
• Amber Grant – Disbursed monthly to female entrepreneurs; one of the monthly winners receives a larger annual award.
  
• USDA Rural Business Grants – The U.S. Department of Agriculture offers grants and programs that focus on rural areas, agricultural businesses, and rural community development.
  
• Veteran Small Business Awards (e.g., StreetShares Foundation) – Targets veterans (or spouses) who own over 50% of a business. Award amounts vary, but they sometimes go up to US$15,000.
  
• First Nations/Native American Grants – Organizations such as the First Nations Development Institute provide grants to Native American, Alaska Native, or Native Hawaiian projects in business, culture, or community development.

Free grants to start a business: FAQs

Dealing with business grants can feel overwhelming, especially for first-time entrepreneurs.  Here are clear answers to common questions about free grants to start a business to help simplify the process:

Do you need to pay back a grant?

No. Grants are not loans and don’t require repayment, but the funds must be used according to the grant provider’s rules.

Can you apply for more than one grant at a time?

Yes. Business owners can apply to multiple programs, but each grant application must meet that program’s unique eligibility and submission criteria.

What happens if the grant money is used incorrectly?

Improper use of grant funds can lead to penalties, disqualification from future funding, or repayment demands.

Is a grant considered taxable income?

In many cases, yes. Check with a tax professional to understand how grant funds impact your business taxes.

Grant funding takes effort to secure, but the rewards can accelerate your business goals.