Business grants are funds provided by governments, organizations, or private entities to support businesses without the expectation of repayment. They’re typically designed to help businesses grow, start new projects, or address specific needs, such as improvement, job creation, and community development. The United Kingdom’s Department for Business, Energy & Industrial Strategy, for example, issued £23 billion in grants during the 2022–2023 financial year. Unlike with loans, you don’t have to pay back grants, but they often come with specific requirements or goals you’re expected to meet.

Below, we’ll explain how business grants work, how to find grants and write applications, and challenges you might face along the way.

What’s in this article?

• How do business grants work?
  
• How do you find grants for your business?
  
• How do you write a compelling grant application?
  
• What challenges might you face when applying for grants?
  

How do business grants work?

Business grants provide funding for specific purposes, which are often tied to goals such as improvement, job creation, and addressing social and environmental challenges. Because grants are usually targeted, a business must match its project or needs to the purpose of the grant. For example, there might be grants for tech startups, minority-owned businesses, or companies that pursue renewable energy projects. Winning a grant usually involves a competitive application process, strict eligibility criteria, and accountability for how the funds are used.

Here’s how grants work:

• Application: Applying for a grant requires a detailed proposal that outlines your business’s goals, the problem you’re solving, and how you’ll use the funds. You often need to provide supporting documents such as financial statements, a business plan, and proof of eligibility (e.g., minority certification, nonprofit status).

• Review and selection: Grant applications are reviewed by a panel or organization to determine whether your proposal supports its priorities. Competition can be tough since many grants have limited funds and attract numerous applicants. If your application is approved, you’ll receive the grant funds either up front or in installments tied to milestones or deliverables.

• Accountability: Most grants come with strings attached, such as regular reporting, proof of how the money is spent, and specific objectives. If you misuse funds or fail to deliver, you might have to repay the grant or lose future eligibility.

Grants are ideal for businesses that share the goals of the grant provider, but they require effort, precision, and good execution to secure and use responsibly.

How do you find grants for your business?

To find business grants, you need to know where to look and how to match your needs with the right opportunities. Here’s how to do so effectively.

Start with government sources

Government grants are a solid starting point because they’re often well documented and widely available.

• Federal level: Research government grants in your country. In the US, Grants.gov is the go-to resource; it’s a one-stop shop for all federal grant opportunities that covers areas including research, manufacturing, and community projects. The UK government has a similar online search tool.

• State and local options: State and city governments also offer grants, especially for small businesses, startups, or initiatives such as job creation. Check out your local government’s economic development office or local business resources. They often have funding specifically for supporting local growth.

Look for industry-specific grants

Many grants are meant for specific fields. This can be a considerable advantage if your business is in a niche area.

• Tech and improvement: Programs such as Small Business Innovation Research in the US are designed to fund startups that push the boundaries of technology and science.

• Agriculture and food: Many national governments offer grants for everything from farming advancements to food supply chain improvements.

Professional associations and trade organizations in your industry are also great places to look. They often run grant programs or share opportunities you might not find elsewhere.

Explore nonprofit and corporate grants

Foundations and large companies often give grants to businesses that support their values or missions. These can be great options if your business focuses on sustainability, diversity, or community impact. For example, FedEx and Visa offer grants for entrepreneurs and small businesses.

These grants are often less bureaucratic than government grants, but they can be more competitive.

Tap into local networks

Local chambers of commerce and business incubators and accelerators are good resources for finding grants. These groups are deeply connected to your area and often know about funding opportunities that don’t make it onto big websites. Plus, they might connect you with people who’ve successfully applied for grants and can share tips.

Use online tools to simplify the search

There are platforms specifically designed to help you find grants, such as GrantWatch and Instrumentl. Some of these tools charge fees, but they can save you a lot of time if you’re looking for targeted results.

Don’t underestimate social media as a place to discover grants. Follow relevant organizations, government agencies, and industry groups to hear about new grants.

Consider partnerships

Some grants are easier to access if you team up with other businesses or organizations. For instance, you might partner with a university for a research grant or collaborate with a nonprofit on a community-focused project. These partnerships can strengthen your application by showing you have the right mix of skills and resources.

Get professional help, if needed

If the process feels overwhelming or if you’re targeting a highly competitive grant, hiring a grant writer or consultant can be a good investment. They can help you identify opportunities, write a strong proposal, and manage the application process.

How do you write a compelling grant application?

Writing a compelling grant application means showing why your business matters and why funding your work will have a real, measurable impact. Here’s how to make your pitch stand out.

Start with the grant’s “why”

Every grant exists for a reason, and it’s your job to prove you’re part of the solution. Is the grant about driving improvement, supporting small businesses in underrepresented communities, or creating jobs? Show how your mission, values, and goals match those of the grant provider.

Make your story unforgettable

Facts and data are important, but stories are what the people who read your grant proposal will remember. Start with something real: the problem you’re solving, the people you’re helping, or the change you want to create. Here’s an example:

“When I started this business, it was to solve a problem I saw every day. Local farmers were struggling to reach customers, and customers wanted fresh, local produce. This grant will help us bridge that gap, grow our network, and increase income for 500 farmers in the next 12 months.”

That’s the kind of story that sticks.

Be specific about what you’ll do

Explain exactly what you’ll do with the money, how you’ll do it, and what success looks like. Here are some examples:

• Don’t say, “This grant will help us grow.”

• Say, “We’ll use the $50,000 to purchase new manufacturing equipment, which will increase production capacity by 30% and reduce lead times by 2 weeks.”

Be as specific as possible. This shows you’ve thought through the details, which makes it easier for reviewers to see the value.

Prove you’re a safe bet

Grants are investments. Reviewers need to feel confident you’ll deliver. Demonstrate your track record, skills, and team. If you don’t have a history of doing exactly what the grant supports, show how your past achievements make you the right person to accomplish it. If you’ve run a successful business for five years or launched a product on a tight budget, say so. Show them you know how to deliver.

Speak their language, not yours

Be direct and concise. Avoid industry jargon and fluffy buzzwords. If the grant is about “economic development,” talk about how your project creates jobs, increases tax revenue, or supports local suppliers. Shape your language to reflect the grant’s priorities.

Clarify the return on investment (ROI)

Grants are often about impact, not profits. What’s the ROI? Maybe you’ll help 1,000 people access affordable childcare or reduce greenhouse gas emissions in your community by 20%. Whatever the result is, quantify it. Numbers make your impact feel real and give reviewers something to anchor their decision on.

Budget carefully

Be thorough and realistic with your budget. If you’re buying equipment, research costs and provide estimates. If you’re hiring, include salaries that reflect the current market rate. Make it clear that you’re maximizing the value of every dollar.

Anticipate and address doubts

Don’t leave space for questions like, “Is this realistic?” or, “What happens if things go wrong?” If there’s a specific challenge involved (e.g., scaling operations, reaching underserved areas), acknowledge it and explain your plan to overcome it. Reviewers will respect your honesty and preparation.

Edit the proposal until it’s sharp

Cut any parts of your proposal that don’t add value. Replace vague statements with specific ones. Read it out loud to see whether it sounds confident and engaging. If possible, ask someone who doesn’t know your business to read it. If they can’t explain your pitch back to you, it needs more work.

Remember that reviewers are human

Your application is being read by real people. Make it easy for them to say yes. Be clear, honest, and specific, but also show them your passion. Why does this grant matter to you? Why does your business matter? If you can make them care, you’re halfway there.

What challenges might you face when applying for grants?

The grant application process is not easy. Challenges can appear at any stage—from finding the right grant to fulfilling grant requirements if you do win. Here are some common challenges and how to tackle them.

Finding the right grant

Figuring out which grants you’re eligible for can be a major challenge. There are so many grants out there, but most have very specific requirements. If you’re not targeting grants that match your business’s goals and needs, you’re wasting your time. To find the right grant:

• Focus on your industry, location, and business type

• Use resources such as government websites, industry associations, and local chambers of commerce to narrow your search

Don’t try to make your business conform to a grant that doesn’t serve your goals. It’s better to apply for fewer grants that are good matches.

Managing the application process

Grant applications often involve long forms, detailed proposals, and piles of paperwork. If you’re running a small business, this can feel like an impossible time commitment. To manage the process:

• Break down applications into manageable pieces with distinct deadlines

• Reuse parts of applications, such as your business description and mission statement

• Consider hiring a grant writer or consultant if the grant is high-stakes

Standing out from the competition

Grants often attract hundreds or even thousands of applicants. Even if you’re a great fit, you’re going up against other applicants with strong cases. To stand out:

• Focus on what makes you unique

• Be specific and back up your claims with data or real-world results

If you don’t win, ask for feedback. Use it to improve your next application.

Figuring out the eligibility requirements

Some grants are highly restrictive and require proof of certifications, a specific business structure, or operations in underserved communities. It’s frustrating to put time into an application only to discover you don’t qualify. To avoid this:

• Read the eligibility criteria carefully before you start

• Contact the grant provider if anything is unclear

Developing a winning proposal

Many businesses struggle to translate their visions into proposals that stand out. To make your application shine:

• Write like you’re talking to someone who doesn’t know your business

• Focus on outcomes and tie the potential impact to the grant’s goals

• Have someone outside your business read it to ensure reviewers can understand your plan

Meeting the reporting requirements

Winning a grant is only half the battle. Many grants require you to track and report exactly how you use the funds. To prepare for this:

• Build a system for tracking expenses and milestones from the start

• Assign someone on your team to handle reporting or set aside time each week to keep records up-to-date

• Be realistic about your capacity and move on if a grant’s reporting requirements are too demanding

Hitting application deadlines

Many grants have strict deadlines. If you’re applying for a range of grants, these can quickly become overwhelming. To mitigate this issue:

• Keep a calendar of grant deadlines you’re considering

• Start early whenever possible

• Have basic pitch materials ready to go, such as your business plan, budget, and mission statement

Addressing uncertainty

No matter how great your application is, there’s no guarantee you’ll win. This can feel discouraging, especially if you’ve invested a lot of time and energy into the application. To beat burnout:

• Explore other funding options such as loans, investors, and crowdfunding to balance the risk

• Learn from each experience and get feedback to refine your pitch