A grant is a sum of money awarded by a government agency (like the SBA or USDA), a private foundation, or a corporation to fund a specific purpose, with no requirement to repay it. Unlike a loan, there's no interest; unlike investment, the funder takes no ownership stake. In exchange, recipients agree to spend the money as proposed and report back on results.
What a grant actually is
Unlike a loan, a grant does not require repayment. Unlike investment, the funder does not take ownership of your business. In exchange, you agree to use the funds for the purpose described in your application and report back on how the money was spent.
Grants are awarded for a reason — workforce development, equipment, research, community impact, or scaling a specific kind of business. The funder has a goal. Your application has to show, in their terms, how your work advances it.
Who gives out grants
- Federal agencies — SBA, USDA, NIH, DOE, EPA, and dozens more. Listed on Grants.gov.
- State and local governments — Economic development, workforce, tourism, and disaster-recovery funds vary by state.
- Private foundations — From the Ford Foundation to tiny family foundations. Often funder-aligned with a cause.
- Corporations — Comcast RISE, FedEx, Verizon, and others run grant programs as part of corporate social responsibility.
Are there grants for small businesses?
Yes, but fewer than the internet suggests. Most federal grants go to nonprofits, researchers, and local governments — not to for-profit small businesses. The for-profit grants that do exist are competitive and narrowly scoped: minority-owned businesses, women-owned businesses, veteran-owned, rural, specific industries.
Are there grants for nonprofits?
Many more. 501(c)(3) nonprofits are the primary audience for most foundation and federal grants. If your work is mission-driven and you have an IRS-recognized nonprofit, the grant landscape opens up dramatically.
What it actually takes to win a grant
- A real business or organization — entity formed, EIN, bank account.
- A clear use of funds — funders want to know exactly what their money will pay for.
- Eligibility match — most denials happen because the applicant didn't qualify, not because the proposal was bad.
- A written proposal — narrative, budget, timeline, and sometimes letters of support.
- Patience — most grants take 30–180 days to award after the deadline.
Your next steps
Before chasing any grant, get the basics right: form your entity, get an EIN, open a business bank account, and write a one-page description of what your business does and who it serves. That document becomes the foundation of every application.
Frequently asked questions
Do I need to be a nonprofit to get a grant?+
No, but you have access to far more grants if you are. For-profit grants exist but are narrower and more competitive.
Do grants need to be paid back?+
No. That's the defining feature. Loans require repayment; grants don't.
Are taxes owed on grant money?+
Often yes — most business grants are treated as taxable income. Talk to a tax professional about your specific award.
How long does the grant process take?+
Plan for 60–180 days from application to funds in hand. Some federal grants take longer.
What agencies give out federal grants?+
The SBA, USDA, NIH, DOE, EPA, and dozens of other federal agencies list open opportunities on Grants.gov.
About our expertise
ASHÉ Legacy Builders is a Texas-based business education company founded by Jey Carrington. Our guides are written from operator experience across grant readiness, business formation, branding, and business credit — and reviewed against our editorial standards.
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