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6 Free Federal Small Business Loans And Grants

As a small business owner looking for ways to get some extra cash to take care of business, federal small business loans and grants are a way out!

In 2021, Guidant Financial and the Small Business Trends Alliance did a study of 2400 current and aspiring business owners in the United States to evaluate the issues that stem the growth of small businesses in the United States. And, at the conclusion of the poll, it was discovered that the most significant difficulty encountered by small firms in the United States was a lack of capital/cash flow (amounting to 23 percent of the surveyed population).

As a small business owner, having restricted resources is not entirely abnormal. It is a situation that could come upon a small business concern at any time, and that’s despite the fact that no business can thrive without cash/capital.

This gives credence to the saying that, “Cash is King” For this reason, capital and cash flow is the blood on which your business survives, as it provides both operating cash and space to develop and innovate. The absence of this cash, thereby, poses an urgent threat to the business’s viability, which could make the business die a natural death.

Are you then a small business owner looking for ways to get cash to sustain your venture? If so, you may be wondering if there are any federal small business loans and grants available. The good news is that there are several types of loans and grants available, and the process of applying for them is not as difficult as you may think. In this article, we will discuss the different types of loans and grants available, as well as the application process.

 Federal Small Business Loans And Grants

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What Are Federal Small Business Loans And Grants?

Before we go into the details of the financial aid available to you as a small business, it would make sense that we explain what federal small business loans and grants are first.

So, what are federal small business loans and grants?

Federal small business loans and grants are financial assistance options available to small businesses through agencies of the federal government. One of such agencies is the Small Business Administration (SBA), which offers a variety of loan programs to small businesses. Additionally, there are a variety of grant programs available through different government agencies. It is therefore safe to say federal small business loans and grants can be a great way to get the capital you need to start or grow your business.

How To Qualify For Federal Small Business Loans And Grants

To qualify for a federal small business loan or grant, your business must meet certain criteria. The most important factor is that your business must be considered a small business as defined by the Small Business Administration (SBA). Typically, this means that your business must have fewer than 500 employees. ;In addition to this, if you are looking to get funding from the SBA, they will consider additional requirements to determine the amount of money that they will be releasing to you.

Generally, you will not be able to borrow more than $5 million from the federal government in the form of a loan or grant. But, that figure is even a lot, as you will need to do a lot of convincing to get that much. Certain funding organizations may also require you to demonstrate that you cannot obtain the funds you need from other sources, such as a bank or venture capitalist.

And finally, you must prove that your business is sustainable and therefore capable of repaying the loan or grant over a period of time.

Small Business Loans Or Grants-Which Should You Go For?

As you may have known before now, while loans and grants remain the leading forms of financial aid for businesses in the US. However, while you are required to repay loans, you are not expected to do the same for grants. This is because grants are usually need-based, and that is why you do not necessarily need to repay them.

But, when it comes to financial relief for small businesses, you may discover that loans suit you better than grants. This is because, while grants are competitive in nature and awarded on a first-come first-serve basis, loans are available anytime you want it.

Therefore, we advise that you get as much information as you can about loan programs, while also applying for grants.

So, let’s look at the various kinds of federal small business loans and grants available to you as a small business owner in the US.

And as the autonomous body charged by the government of the United States, to provide aid to small businesses to help boost and promote the economy in general, the Small Business Administration (SBA) will be the best place to start.

Before we go on, the US Small Business Administration (SBA) have got a message for you

Small business grants: Everything you need to know.

  • The Small Business Administration does not offer grants for beginning or developing a business.
  • The Small Business Administration (SBA) awards grants to nonprofits, Resource Partners, and educational organizations that help people start businesses by providing advice and training.
  • Only @sba.gov email addresses are used by the SBA to communicate. If someone claiming to be from the SBA contacts you but does not use an official SBA email address, you should consider it a scam and inform the SBA here.

READ MORE: 24 Useful Grants Management Systems For Your Organization

Small Business Administration Financial Aid For Small Businesses

Despite the SBA’s claim that it does not offer any grants for individuals looking to start or expand their business, we have however been able to get you grant offers that you can still take advantage of. These grants are part of financial aid offered by SBA to help small businesses grow. And while these may not be what you expected as federal small business loans and grants, they are grants regardless, and that is what matters

Here are some of the grant offers from the Small Business Administration:

Grants for community Organizations

Community organizations that promote entrepreneurship, such as those that help veteran-owned and service-disabled veteran-owned enterprises, as well as Small Business Development Centers, can apply for funds from the SBA. These grants, though not federal small business loans and grants, still help such community organizations to make a better impact on society at large.

Management and technical assistance

The SBA’s 7(j) Management and Technical Assistance Program, or the 7(j) Program, is authorized by the Small Business Act and provides high-quality assistance to SBA-approved small businesses to help them compete favorably for federal, state, and local contracting opportunities as a prime or subcontractor. And f or the eighth year in a row, the federal government has exceeded its small business contracting objective of 5%, giving a record-breaking $132.9 billion in prime contracts to small firms.

Small business Research And Development grant programs

To promote technology and innovation, meet Federal research and development (R&D) objectives, and increase commercialization to transfer R&D into effect, the SBIR and STTR programs fund a wide portfolio of startups and small enterprises across technological fields and industries.

State Trade Expansion Program (STEP)- Exporting Grants For State Entities

Since 2011, the STEP grant program has assisted thousands of small businesses in obtaining funding and finding overseas consumers. STEP assists small firms overcome barriers to exporting by offering grants to cover the costs of entering and growing into overseas markets through awards to states and territories in the United States.

Federal Small Business Loans

USDA Rural Business Development Grants

The Rural Business Development Grant program is administered by the United States Department of Agriculture, and it offers funding to help small businesses in rural areas strengthen and thrive.
To qualify, businesses must have less than 50 new workers, gross revenue of less than $1 million, and be located in an approved rural area. USDA Rural Development accepts applications through local and state offices.

SBA Small Business Loans

The US Small Business Administration assists small firms in obtaining finance by establishing loan rules and lowering lender risk. Small businesses can acquire the money they need with the help of these SBA-backed loans.

To get an SBA-backed loan, go to Lender Match

Some Other Resources For You

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The Application Process For Federal Small Business Loans And Grants

The application process for federal small business loans and grants will definitely not be the same across various platforms. Therefore, you can start by visiting the website of the agency that offers the grant or loan you’re interested in to get the application procedure of each program. Most agencies have detailed information on their website about how to apply, who is eligible, and the criteria they will use to evaluate applications.

It’s always a good idea to read through the guidelines carefully to make sure you understand them and meet all the requirements. You may also need to submit a business plan, financial statements, or other supporting documents. So take your time, gather all the information you need, and submit a strong application. You never know—you may be one of the lucky recipients!

How To Use Federal Small Business loans and grants

If you’re fortunate enough to receive a small business loan or grant, it’s important to use it in the most effective way possible. First, make sure you understand the terms and conditions of the loan or grant. This will help you avoid any unwanted surprises down the road.

Next, use the money to expand your business and increase sales. This could mean purchasing new equipment or hiring additional staff. Whatever you do, make sure the investment is worthwhile and will help your business grow. It’s also a good idea to consult with an accountant or financial advisor to ensure you’re making the most of your federal small business loan or grant.


If you’re a small business owner, you may be eligible for some federal small business loans and grants. These loans and grants can be used to help finance your business, cover start-up costs, and more. To qualify for federal small business loans and grants, you’ll need to meet certain requirements, and the application process can be lengthy.

However, the benefits of these loans and grants can be significant. So, if you’re looking for financial assistance to help your business grow, be sure to explore your options for federal small business loans and grants.

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