If you own or plan to start a small business in the United States, you may be able to find business grants that do not have to be repaid. Unlike a business loan, a grant generally does not require monthly payments or repayment when the recipient follows the program’s rules.
However, there is an important point: free government money for ordinary small-business expenses is limited. Many federal grants are designed for research, technology, rural development, agriculture, energy projects, or organizations that support small businesses. The U.S. Small Business Administration (SBA) specifically directs businesses toward programs such as SBIR and STTR rather than offering general-purpose grants for most businesses. Small Business Administration
Below are some legitimate programs and official resources to check.
1. Small Business Innovation Research (SBIR) Grants
The Small Business Innovation Research (SBIR) program is one of the major federal sources of non-dilutive funding for qualifying U.S. small businesses.
SBIR is intended for businesses developing innovative technology, products, or services that address federal research and development needs. The program is coordinated by the SBA and funded through participating federal agencies.
The official SBIR website describes this funding as equity-free and non-dilutive, meaning the government does not take ownership of your company in exchange for the funding. SBIR
SBIR funding can support different stages of research and development. According to SBIR.gov, Phase I generally supports proof-of-concept work, while Phase II supports continued research and development. SBIR
Who may qualify:
Generally, a qualifying U.S. for-profit small business with fewer than 500 employees. Other ownership and eligibility rules apply. SBIR
Official information:
SBIR.gov – America’s Seed Fund
2. Small Business Technology Transfer (STTR) Grants
The Small Business Technology Transfer (STTR) program is similar to SBIR but requires a formal partnership between a small business and an eligible nonprofit research institution.
This can be useful for businesses developing new technology with a university, research organization, or other qualifying research partner.
STTR funding is also part of America’s Seed Fund and provides non-dilutive funding for eligible research and development projects. SBIR
For STTR projects, the small business must perform at least 40% of the work and the research institution must perform at least 30% of the work. SBIR
Official information:
SBIR/STTR Funding Opportunities
3. NIH Small Business Grants
The National Institutes of Health (NIH) offers SBIR and STTR grants for qualifying small businesses working on health, medical, biomedical, and related technologies.
As of 2026, the NIH has an open parent SBIR opportunity covering areas supported by NIH, CDC, and FDA. The current opportunity allows eligible U.S. small businesses to apply for Phase I, Phase II, and certain other SBIR funding options. SBIR
These grants are not designed for a normal retail store, restaurant, cleaning business, or general startup. They are intended for qualifying research and development projects.
Official information:
NIH SBIR/STTR opportunities
4. USDA Rural Business Development Grants
The U.S. Department of Agriculture (USDA) operates the Rural Business Development Grant program.
This program provides grant funding for economic development and projects benefiting small and emerging businesses in rural communities. However, there is an important eligibility restriction: individual for-profit businesses cannot directly apply for these grants.
Eligible applicants include public bodies, federally recognized Indian Tribes, and nonprofit organizations primarily serving rural areas. Rural Development
Grant funds can support activities such as business training, technical assistance, feasibility studies, market research, equipment, infrastructure, and other eligible rural business projects.
Because the grant is generally awarded to an eligible organization rather than directly to an individual business owner, this program should not be confused with a general small-business startup grant.
Official information:
USDA Rural Business Development Grants
5. USDA Rural Energy for America Program Grants
The Rural Energy for America Program (REAP) can provide grant funding for eligible rural small businesses and agricultural producers making certain renewable-energy or energy-efficiency investments.
USDA says the program supports rural small business owners and agricultural producers seeking to make energy-efficiency improvements and renewable-energy investments. Rural Development
Examples may include eligible projects involving:
- Energy-efficiency improvements
- Renewable-energy systems
- Equipment and other qualifying energy investments
REAP has both grants and loan-related assistance, so applicants should carefully check the current funding rules before applying.
There was also a USDA announcement in 2026 stating that further REAP grant awards were temporarily paused while regulations were being updated. Applicants should therefore check the current USDA program page before preparing an application. Rural Development
Official information:
USDA Rural Energy for America Program
6. Department of Energy SBIR/STTR Funding
The U.S. Department of Energy (DOE) participates in SBIR and STTR funding for eligible small businesses.
DOE funding can support companies developing technologies related to energy, science, manufacturing, environmental technologies, and other federal research priorities.
DOE states that its SBIR/STTR programs support U.S. for-profit small businesses through a phased process covering technical feasibility, technology development, and commercialization. The Department of Energy’s Energy.gov
The DOE also currently lists funding opportunities through its SBIR/STTR program.
Official information:
U.S. Department of Energy SBIR/STTR
7. Federal Grants Listed on Grants.gov
Grants.gov is one of the most important places to search for legitimate federal grant opportunities.
You can search by:
- Small business
- Industry
- Federal agency
- Location
- Funding category
- Eligibility
- Open and forecasted opportunities
Grants.gov currently lists opportunities specifically for small businesses, including SBIR and STTR programs. For example, a forecasted 2027 Administration for Community Living SBIR opportunity lists small businesses as eligible applicants and identifies the funding instrument as a grant. Grants.gov
Official website:
Grants.gov – Search Federal Grants
8. State and Local Small Business Grants
Federal grants are not the only source of grant funding.
Some states, counties, cities, economic-development agencies, and local organizations offer grants for small businesses. These programs can sometimes be more relevant to an ordinary business than federal research grants.
For example, a state or local economic-development agency may periodically offer funding for:
- Business expansion
- Commercial property improvements
- Equipment
- Job creation
- Downtown business development
- Small-business recovery
- Technology upgrades
- Minority or underserved-business initiatives
- Rural business development
The rules, application periods, and funding amounts are different in every location.
A good place to start is your state’s official economic-development website and the SBA’s local assistance resources.
Official SBA information:
SBA Grants and Funding Opportunities
Grants vs. Small Business Loans
It is important to understand the difference before applying.
A grant generally provides funding for an approved purpose without the normal repayment obligation of a loan.
A loan must normally be repaid, usually with interest.
For example, USDA has several programs that combine grants and loans. REAP includes both types of assistance, while USDA’s Business and Industry programs include loan guarantees. Rural Development
Therefore, don’t assume that every program described as “small business funding” is free money.
Do You Have to Pay Back a Business Grant?
Usually, a properly used grant does not work like a loan. However, “no repayment” does not mean “no conditions.”
Grant recipients normally have to follow the award agreement and use the money for approved purposes.
For example, an award may require:
- Financial records
- Progress reports
- Proof that funds were spent on approved activities
- Meeting project deadlines
- Following federal or program-specific rules
- Returning funds in certain circumstances if the award terms are violated
For this reason, always read the official notice of funding opportunity and award agreement before accepting a grant.
How to Find Small Business Grants
Start with official government websites rather than websites promising guaranteed grants.
Step 1: Check Grants.gov
Search for opportunities using terms such as “small business,” “SBIR,” “STTR,” “technology,” “rural business,” or your specific industry.
Step 2: Check SBIR.gov
If your business develops a new technology, product, scientific process, medical technology, energy technology, or other research-based innovation, search SBIR/STTR opportunities.
Search SBIR/STTR Funding Opportunities
Step 3: Check Your State
Search your state’s official economic-development agency for current small-business grants.
Look for programs using terms such as:
small business grants + [state]
economic development grants + [state]
business expansion grants + [state]
Use the official state government website whenever possible.
Step 4: Check Your Local Government
Cities and counties sometimes have programs that are not advertised nationally.
Look at your local economic-development department, business development office, or community development agency.
Step 5: Check Your Industry
Your industry can make a major difference.
For example, technology companies may find SBIR/STTR opportunities, while rural agricultural businesses may have USDA programs that fit their projects.
Who Is Most Likely to Find a Federal Grant?
Federal small-business grants are often targeted rather than general.
A business may have a better chance of finding a relevant opportunity if it is working on:
New technology: SBIR/STTR programs may be relevant.
Medical or health innovation: NIH, CDC, FDA, and other HHS programs may have opportunities.
Energy technology: Department of Energy programs may be relevant.
Rural business development: USDA programs may provide opportunities, although some are restricted to organizations rather than individual businesses.
Agriculture: USDA has several funding programs for eligible agricultural businesses and producers.
This does not mean that these businesses automatically qualify. Each funding opportunity has its own eligibility rules.
Be Careful With “Guaranteed Grant” Websites
You should be cautious about websites that promise that every business owner can receive thousands of dollars in free government money.
The SBA warns about grant-related fraud and directs applicants toward legitimate federal programs and official resources. Small Business Administration
A legitimate grant normally has:
- A clearly identified funding agency
- Written eligibility requirements
- An official application process
- A funding opportunity or program announcement
- Application deadlines
- Rules for how the money can be used
You should never assume that a business grant is legitimate simply because a website uses words such as government grant, free money, or guaranteed funding.
Final Thoughts
There are legitimate small business grants that do not operate like loans and generally do not require repayment, but they are not available for every type of business.
For most ordinary small businesses, the biggest challenge is finding a grant that matches the business’s location, industry, project, and eligibility requirements. Federal programs such as SBIR and STTR are especially important for businesses developing innovative technology or conducting research. USDA also offers specialized programs for qualifying rural and agricultural businesses. SBIR
For the widest search, use Grants.gov, SBIR.gov, SBA.gov, and the official government website for your state.
