Grants vs government contracts
An enormous number of people search for free government grants to start a business. It is worth saying plainly: for an ordinary business, those essentially do not exist. The federal money available to a small firm is contracts, and there is a great deal of it.
2,458
federal solicitations set aside for small business are open right now, out of 10,677 in total. This is what federal money for a small business actually looks like: paid work, not a handout.
The difference
A grant is money given to pursue a public purpose, usually research, or delivered through a non-profit or a state programme. A contract is payment for goods or services the government wants. If you run a normal business, you are looking at contracts.
Federal grants that genuinely exist
SBIR and STTR fund research and development at small firms and are real, substantial and highly competitive, but they fund research rather than operations. Beyond that, most federal grant money flows to states, local governments and non-profits rather than to companies. Grants.gov lists everything, and browsing it is the fastest way to see that almost none of it applies to an ordinary business.
What about the ones being advertised
Most of the grants marketed to small businesses online are private competitions run by companies and foundations. Some are real and worth entering. Anything that asks you to pay a fee to apply for a government grant, or offers to find grants for a fee, is a scam. Federal applications are always free.
Why contracts are a better target
There is far more money in contracts, the competition is structurally tilted towards small business through set-asides, and unlike a grant it is repeatable. A contract won this year builds the record that wins the next one.
Questions people ask
Are there free government grants to start a business?
Essentially no. Federal grants fund research, states, local government and non-profits, not ordinary business start-up costs.
What is SBIR?
The Small Business Innovation Research programme, which funds R&D at small firms. It is real and competitive, and it funds research rather than operations.
Where can I find legitimate federal grants?
Grants.gov lists all of them, free. Applications are always free.
Are grants for women or veterans different?
Federal support for both groups is delivered mainly through contract set-asides rather than grants. Private grant competitions exist and are separate.
Is a contract better than a grant?
For most businesses yes. More money available, structurally favourable to small firms, and repeatable.
Related
Set-aside contracts · How to get government contracts · WOSB certification · SDVOSB certification