Starting a Business

Government grants for small businesses

Learn how federal and state grant programs can help you grow your business.

A government grant can be a boon to your small business.

Sundolier, a solar lighting company in Boulder, Colorado, won a $500,000 grant in 2013 from Colorado's Advanced Industries Accelerator program, which promotes growth and sustainability in industries such as aerospace, bioscience, energy, and natural resources that are driving economic development.1

"The grant is helping us grow operations, expand our sales pipeline, and achieve profitability," says Sundolier CEO Peter Novak.

Understanding federal and state grants for businesses

A grant is a monetary award given to an organization for a specific purpose, such as creating jobs, advancing education, or reducing environmental impact. The U.S. government offers grants for the development of programs and products that support federal initiatives in health, technology, and other areas. Businesses in those industries — as well as those that focus on basic research and development in any industry — are best positioned to qualify for federal grants.

VisionSpring, for example, won a $585,300 grant from the U.S. Agency for International Development (USAID) and its Development Innovation Ventures (DIV) program.2 VisionSpring, an organization that provides low-cost eyeglasses to people unable to work or attend school because of poor eyesight, used the award to test its business model in India.

DIV awards grants from $25,000 to $15 million for development ideas to improve global prosperity in any country where USAID operates.3 The initial two-step application is open year-round to innovators in all industries.4 You can search for DIV grants as well as other federal grants by keyword and industry at grants.gov. You can also research grant programs in your state

Be precise when applying for government grants

"The best government grant proposals closely match the grantor’s own objectives. A well-researched business, marketing, and development plan is critical, but be sure to follow instructions," says Linda Vallejo, grant writer, consultant, and owner of A to Z Grantwriting.

"Submit exactly what's asked for, and use language that's clear and concise so the grantor can easily understand your project," Vallejo says. Before submitting, ask an unbiased third party to review your proposal and make suggestions for improvement.

Heed your obligations with government grants

Government grants are public money, which makes you accountable to taxpayers if you win one. Grant performance criteria set by government agencies can be stringent, ranging from meeting accounting protocols, production deadlines, and budget benchmarks to agreeing to hire local employees. Be prepared to allocate your resources to meet the requirements of your grant or you could face fines and even criminal penalties.5

To wrap up, if your goals are compatible with those of a federal or state organization and you're able to meet the requirements, government grants can help you grow your business while providing an important public service.


1 "Advanced Industries Accelerator Programs." AdvanceColorado.comhttp://www.advancecolorado.com/funding-incentives/financing/advanced-industries-accelerator-programs 

2 "USAID Development Innovation Venture Invests In VisionSpring." Globalgiving.org. http://www.globalgiving.org/pfil/7546/VisionSpring_USAIDDIV_Press_Release.pdf

3 "5 things you need to know about applying to DIV." DIVatUSAID.tumblr.com. http://divatusaid.tumblr.com/

4 "How to Apply." USAID.gov. https://www.usaid.gov/div/apply

5 "A Definitive Guide to Government Grants." Entreprenuer.com. http://www.entrepreneur.com/article/202110

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