Grants are free money you don't have to repay. Loans must be repaid with interest. Grants are also much harder to get: applications are competitive, eligibility is narrow, and award sizes are smaller. Most grants target specific demographics, industries, or social outcomes. Federal grants for general small business use are extremely rare. State and private grants are more common but still competitive. Most business owners end up using a mix: chase grants for what qualifies, fund the rest with loans.
| Grant Source | Typical Award Size | Eligibility | Application Difficulty |
|---|---|---|---|
| Federal (SBIR / STTR) | $50K to $1.5M | R&D, tech innovation, government priority areas | Very high |
| State economic development | $1K to $50K | In-state employer, specific industries | Moderate to high |
| Corporate grants (FedEx, Visa, etc) | $500 to $50K | Varies, often minority/women-owned | High |
| Nonprofit / foundation grants | $1K to $25K | Mission alignment, community impact | Moderate |
| Local chamber / city grants | $500 to $10K | Located in city, hires locally | Moderate |
| Industry-specific grants | $2K to $100K | Specific industry (agriculture, arts, energy) | Moderate to high |
Sources: lender published rate tables, SBA program guidelines, and industry data as of June 2026. Rates and qualification criteria change frequently. Confirm with each lender before applying.
Grants get overhyped. Most small business owners spend more time applying for grants they don't win than they would have spent getting a loan they could have used the same week. Grants are worth pursuing only if you fit the eligibility criteria narrowly. Otherwise, loans are faster, more flexible, and more reliable. Apply for both if you qualify, but don't wait on grants to start operating.
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