Does the SBA give grants to start a business?

No. The SBA guarantees loans and funds intermediaries and counselling; it does not make general grants for starting or expanding a business. Anyone claiming otherwise is misinformed or lying.

Are grants worth the effort?

For an SBIR-eligible research business, emphatically yes. For a typical service business, the hours usually produce more return applied to sales than to applications - with the exception of small local programmes, which are far less competitive than national ones.

Small business grants: how it works, what it costs, who it suits

Small business grants

Real business grants exist, but almost none of them are general-purpose. They are attached to research, to a specific location, to a demographic, or to a policy goal - and the competitive ones cost many weeks of work to win. Any offer of a free, general, guaranteed government business grant is a scam, without exception.

Where real grants come from

Federal research programmes, chiefly SBIR and STTR, which fund research and development at small firms across eleven participating agencies and are by far the largest source of genuine federal grant money for businesses. State and municipal economic development offices, which fund location-specific goals like main-street revitalisation or job creation. Private and corporate programmes run by foundations and large companies.

Grants.gov lists federal opportunities and is free. The SBA does not make general small business grants, and no federal agency charges a fee to apply for one.

How to recognise the scam

The tells are consistent: an unsolicited approach, a fee to apply or to 'release' funds, a claim that you have already been awarded something you never applied for, pressure to act within hours, and a request for bank details or a Social Security number. Government agencies do none of these things.

A second, subtler version charges a legitimate-sounding fee for 'grant matching' or 'application preparation' against a list of opportunities you could have found for free in an afternoon.

Commonly used for

Research-intensive businesses that fit SBIR or STTR
Businesses in areas with active local economic development funding
Founders with time to invest in a competitive application

What to check before signing

No legitimate grant charges a fee to apply
The SBA does not make general-purpose grants to start or grow a business
Reporting and compliance obligations after an award are real work
Grant income is generally taxable to a business - check with an accountant

Grants: common questions

Does the SBA give grants to start a business?: No. The SBA guarantees loans and funds intermediaries and counselling; it does not make general grants for starting or expanding a business. Anyone claiming otherwise is misinformed or lying.
Are grants worth the effort?: For an SBIR-eligible research business, emphatically yes. For a typical service business, the hours usually produce more return applied to sales than to applications - with the exception of small local programmes, which are far less competitive than national ones.