What are the Different Types of Government Grants to Start a Business?

Ken Black

Though some television infomercials promise there are plenty of government grants to start a business available, those grants are often not from the U.S. federal government, if they exist at all. Rather, in the United States, it is much better to seek out state and local sources when looking for grant money. In Canada, and perhaps in other countries, the opportunity to seek startup grants from the federal government may be greater.

Some grants require businesses to be located in blighted areas in order to revitalize the neighborhood.
Some grants require businesses to be located in blighted areas in order to revitalize the neighborhood.

Some Canadian government grants focus on providing seed money to small businesses that may struggle to get started any other way. This seed money is then used to develop a concept or idea that can later yield results for years to come. Government grants to start a business are often considered justified by some countries whose leaders feel the return on investment is more than beneficial when those businesses become successful and start paying in tax revenue, or providing new technologies to the country.

Indeed, no matter what the venue or location, the goals of nearly all government business grants are the same — to promote economic development and employ as many local residents as possible. Thus, income not only comes from the business, but also the employees as well. These employees will then go make other purchases, spurring even more economic activity and thus bringing in even more tax revenue in the long run. Therefore, nearly all grants to start a business could be considered economic development grants.

Therefore, the best place in the United States to search for government grants to start a business is a state or local economic development office. The grants available often come with a myriad of conditions. For example, you may need to locate in a blighted area and commit to staying there for a certain number of years. Such conditions may not be for everyone, and may cause some to shy away from taking any government money. Still, it can be one more funding source to consider for those willing to accept the conditions.

Besides the local, state and federal government grants, there are also other grants that may be used to start a business, even if they are not specifically for that purpose. For example, if an individual wanted to start a research company, there could be opportunities to get grants for research projects, which could then provide the capital needed to start a full-time research institution. This is a harder way to do it, however, because grants often look for those with established track records.

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Discussion Comments


There are sometimes grants and other perks that can come from having a women as the president of the company.

My parents ran a business together. My dad had started the business before he even met my mom, but when they got married she took over the business side and my dad ran the shop side. They placed my mom as the president because it was better to have a woman in that role.


I am in the process of starting a restaurant. Does anyone know of any grant or benefit programs from the government that might be able to help me out? Anything would help. Has anyone run a restaurant before? Were you able to get help from anyone besides a bank?

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