A small business grant is an amount of money given to a business for a specific purpose. Grant agencies support businesses that match their mission, initiative, or goals. For example, the U.S. Small Business Association offers a State Trade Expansion Program (STEP) to provide financial aid to small businesses interested in export development. The state of Missouri also offers grants to a wide range of businesses.
Types of Small Business Grants
The main grant types in the U.S. are federal, state, local, and corporate. These grants often focus on a specific group of people or industry or are general funds awarded through a contest. Sometimes grants are only offered once, but they are often awarded annually.
Federal grants come directly from the U.S. government. They may be given to a state, region, or county that will then choose individuals to award. These grants may also be awarded directly to an individual or business. For some federal grants, only nonprofit or community-run organizations are eligible, so it’s important to make sure a grant is applicable to for-profit businesses.
Unlike federal grants, state grants are limited to businesses in their state. These grants focus on the state’s needs, offering funds to fill gaps in their economy or allow new industries to grow. State grants are usually offered to business owners who need help with start-up costs, employee salaries, and growth.
Local grants, such as those awarded by counties or cities, often take the form of tax breaks or loans. Local grants also tend to focus on a specific community need, limiting the number of businesses that qualify to apply. These needs can include housing, job creation, or community improvement.
Corporate grants offered by large corporations may be specific to the corporation’s own mission and industry or may be monetary awards offered to any eligible party. Corporate grants may also take the form of contests. For example, Fedex’s annual Small Business Grant Contest awards 10 winners $30,000, $1,000 print credit at FedEx Office, access to FedEx Premier Customer Service, a sustainable packaging consultation, a digital sales consultation, 20% off a search engine optimization (SEO) monthly plan with HigherVisibility, mentor matching with the Entrepreneurs’ Organization, and more. Contest winners are chosen via public voting.
Industry-Specific and Demographic-Specific Grants
Grants can also be categorized via the industry they serve. Technology corporations may only offer grants to other technology businesses. A state may offer grants to small businesses in their main industries or that fill a gap in their economy. Some grants focus on issues such as small business sustainability.
In addition to industry-specific grants, there are grants at all levels that are awarded to specific demographics. Women, people with disabilities, people of color, and other groups may find grants that support their small businesses as a way to promote equality and diversity.
Examples of these grants include:
Small Business Innovation Research Program
The U.S. Small Business Association’s America’s Seed Fund program includes The Small Business Innovation Research and Small Business Technology Transfer programs. According to their website, America’s Seed Fund provides small businesses with the funds to engage in federal research/research and development, focusing on technological innovations and research institutions.
The Amber Grant
The annual Amber Grant is offered by WomensNet, a community of women that offers a variety of grants to women-owned businesses. The Amber Grant was founded in 1998 to honor Amber Wigdahl, a 19-year-old who died before she could live out her business dreams. Each month, the grant offers a woman-owned business $10,000. At the end of the year, one of the year’s winners is awarded another $25,000.
Natural Resource Sales Assistance Program
The Natural Resource Sales Assistance Program is run by the U.S. Small Business Association. This program awards grants to small businesses to help them purchase or lease government property before a larger business can claim it. The program also provides counseling and assistance to small businesses as they navigate federal government sales and leasing.
G.I.F.T. Funds in Kansas City
Kansas City offers two grants per month to majority Black-owned small businesses. These are known as G.I.F.T. Funds. One monthly grant is either $25,000 or $50,000 to help a small business grow. The other is $10,000 to a new small business.
Resources: More Grant Opportunities
U.S. Small Business Association: A government association that helps small businesses with funding, counseling, and more.
Human Rights Campaign: The “Queer to Stay” Grant awards funds to small businesses that support LGBTQ+ people, people of color, and women.
Hello Alice: Hello Alice awards $5,000-$25,000 grants to small businesses with a commitment to their community.
Rural Business Development Grants: The U.S. Department of Agriculture offers grants to rural communities to disperse to small businesses with fewer than 50 employees.
Missouri Small Business Grant Program: The Missouri Department of Economic Development set aside $30 million in grant funds for small businesses affected by COVID-19.
Starting a Small Business in Missouri
There are several necessary steps to starting and operating a small business in Missouri. From finalizing an idea to breaking ground, understanding the process will help your business succeed in the long run.
The Necessary Steps
- Conduct research and development.
- Before finalizing a business idea, research the target market.
- Choose a business plan that best serves the area.
- Create a budget and a marketing plan.
- Find funding.
- Research possible funding sources that best fit the business plan.
- Find grants, investors, and other sources.
- Consider ongoing expenses, not just startup costs.
- Decide what business entity to establish.
- Businesses require licenses to operate, and these licenses depend on the type of business entity.
- These entities include:
- Sole proprietorship
- Limited liability limited partnership (LLLP)
- Limited liability partnership (LLP)
- Limited partnership (LP)
- Limited liability company (LLC)
- Research what each entity requires and decide which best fits the business plan.
- Register and license the business.
The Office of Missouri’s Secretary of State: Missouri Secretary of State John R. Ashcroft has created a list of the basic steps for anyone starting a small business in Missouri.
Guide to Necessary Forms: A guide to all the forms, links, and information necessary for starting a small business in Missouri.
Chamber of Commerce: The U.S. Chamber of Commerce provides a guide with statistics, steps, and data for small businesses in Missouri.
MO Source Link: A helpful checklist for new small business owners.
Who Receives Small Business Grants in Missouri?
Missouri’s main industries are agriculture, steel, electronics, and automotive. In fact, 66% of land in the state is used for agriculture. That’s likely why 9 of the 10 most recent grants announced by the Missouri Department of Economic Development (DED) were related to agriculture, the environment, and natural resources. These grants bolster the local agriculture industry, provide funds for new small businesses to take root, and keep existing small businesses afloat.
Missouri also awards grants to small business owners who pursue other industries. For example, the DED lists a new grant program, the Advanced Manufacturing Resiliency Grant Program, which will invest in small businesses that work with semiconductors or pharmaceuticals.
Another interest of the DED is improving Missouri’s broadband infrastructure. In 2018, the Missouri Broadband Grant Program was created in the Revised Statutes of Missouri sections 620.2450 to 620.2458. This grant offers resources to providers, communities, and regions that work to extend broadband to Missouri’s unserved and underserved areas.
Missouri is also expanding its efforts to increase tourism and travel through Cooperative Marketing Grants. These grants and programs offer funds and specialists who help small businesses interested in the tourism/marketing industry. These grants are the Marketing Matching Grant, the Supporting DMO Grant, the Marketing Platform Development Program, and the Search Engine Marketing Partnership.
Recent Data About Grants in America
In January 2023, the Census Bureau revealed that Americans have applied to start 10.5 million new businesses in the last two years. To support these entrepreneurs, the federal government has announced an increased effort to fund small businesses. For example, the federal government tries to award at least 3% of all federal contracting dollars to service-disabled veteran-owned small businesses. It also allocates at least 5% for women-owned small businesses.
One new program is the State Small Business Credit Initiative (SSBCI), which provides about $10 billion to be invested or credited to existing small businesses and to assist small businesses applying for funding and government support programs.
The vast spectrum of industries means there are many different grants available for small business owners. Searching for focused industry grants can lead to the best odds of success.
Using Small Business Grants in Missouri
Some grants require their funds to be used for certain purposes, but others allow recipients to use them however they’d like. Some common uses of grants include the following:
Business expansion grants are available for small business owners who need to expand a current location, add a new building (such as a garage for an auto repair business), or open an entirely new location. For example, the Department of Agriculture offers Rural Business Development Grants to help rural business owners acquire new land, train more employees to work on the land, and create long-term economic strategies.
These grants often come from state governments or corporations interested in funding small businesses in their own industry.
According to the Federal Reserve’s 2023 Report on Employer Firms, 60% of businesses had challenges hiring or retaining staff in 2022. To make their businesses more attractive to qualified workers, employers raised wages or offered non-wage compensations. These changes require funds, which can be supplemented by small business grants.
The Federal Reserve found that 54% of businesses had trouble paying their operating costs in 2022. In order to meet their needs and keep their small business open, owners may turn to grants that allow them to stay afloat during hard times.
Fifty-one percent of small businesses experienced trouble reaching customers and growing their sales in 2022, according to the Federal Reserve. Grants that focus on bringing business into the area, like the Missouri grant that funds marketing for tourism, can help these small businesses attract attention and continue to grow.
Resources: Small Business Needs
Oberlo: Up-to-date information on small businesses in America that can be useful while planning.
U.S. Small Business Association: A guide to calculating small business costs, including a Break-Even Analysis Calculator.
Missouri Secretary of State: A Missouri Small Business Startup Guide that offers detailed information on taxation, startup capital, and liability, among a host of other topics.
Explore Your Business Potential in Missouri
If you’re interested in starting a small business in Missouri or expanding your current business, a number of grants are available. Federal, state, local, and corporate grants offer small businesses the funds they need to survive and thrive. Research grants before applying and make sure to apply to several grants to increase your chance of receiving funding.