Can a new business get a grant? Sometimes. Some state, local, and corporate programs accept brand-new businesses, and an LLC can apply wherever for-profit businesses are eligible. But many grants exclude for[profits or expect a track record, and the SBA doesn't give grants to start a business. Each program's rules decide.
Key takeaways
- An LLC is a legal structure, not a grant category.
- Most grants expect a formed business with a tax ID and any licenses.
- Federal grants mostly fund organizations. Start with local, state, and corporate programs.
- Don't form an LLC or a nonprofit just to chase a grant.
This is part of our guide to grant readiness for small businesses. A grant is money a funder gives for specific work, which you don't repay as long as you follow its terms. Whether a new business can get one comes down to eligibility, meaning the funder's rules about who can apply. Here's what those rules usually check.
Can a new business get a grant if it just started?
Yes, if the program's rules allow it. How new you are matters less than whether your business is formed, set up correctly, and the kind of organization the funder accepts.
Every federal funding notice includes a section that defines who is eligible (Grants.gov), and most other funders publish similar rules. Before you write a word, check these:
| What funders check | What it means | If your business is new |
| Type of organization | For-profit, nonprofit, or both | Skip programs closed to your type |
| Formation | A business legally registered with your state | Register before you apply, if you plan to anyway |
| Tax ID | An Employer Identification Number (EIN) from the IRS | Get it after you register with your state; it's free |
| Federal registration | SAM.gov, the federal government's system for organizations that receive federal awards | Start early; it can take up to a month |
| Location | Where you're based and where the work happens | Match the program's area |
| Licenses | The licenses and permits your work and location require | Have them in place before you apply |
| Time in business | Some programs require a track record | Look for programs that don't, or apply later |
| Purpose | What the money will pay for | Name a specific project |
Two of those cost nothing. The IRS issues EINs for free and warns never to pay a fee for one (IRS). SAM.gov registration is free too (NSF).
Can an LLC get a grant?
Yes, wherever for-profit businesses are eligible. An LLC is a legal structure, not a grant category.
A limited liability company (LLC) is a business structure created under state law. Depending on its number of members and its elections, the IRS taxes it as a corporation, a partnership, or part of its owner's return (IRS). Applications may ask for both your structure and your tax classification, so know yours.
For eligibility, the bigger question is whether a program accepts for-profit businesses. Federal notices list "for-profit organizations" and "small businesses" as applicant types separate from nonprofits, and small business grants go to companies that meet the SBA's size standards (Grants.gov). Many programs list only nonprofits or governments.
Which funders are open to new businesses?
Local, state, and corporate programs tend to be the most open to new for-profit businesses. Federal and foundation grants are harder. These are general patterns, not rules.
| Type of funder | Open to new for-profit businesses? | What to check |
| Federal agencies | Rarely | Federal grants most often go to governments, universities, and other organizations and the SBA doesn't fund starting or expanding a business |
| SBIR and STTR | Yes, for research and development | The programs' own eligibility rules, at SBIR.gov |
| State and local programs | Sometimes | Location, licenses, and time in business |
| Foundations | Rarely | Most fund nonprofits and charitable projects |
| Corporate programs and contests | Often | The official rules, including who can enter |
Federal grants usually fund specific programs or projects (Grants.gov), and the SBA says it does not provide grants for starting or expanding business (SBA). So it's worth knowing whether the SBA really gives grants before you chase an offer that claims it does. Research and development startups are the main federal exception, through SBIR and STTR.
Are there grants for home-based businesses?
Yes, when the program accepts them and you're properly licensed. Where you work matters less than the program's location rules and your permits.
Some local programs fund storefronts or commercial spaces, which won't fit a home-based business. Others are open to any licensed business in the area. Either way, check your city's rules. In Salinas, California, for example, home-based businesses within city limits need a home occupation permit, a local permit to run a business from a residence, before they can get a business license (City of Salinas). A funder may ask to see both.
Should I form an LLC or a nonprofit just to get a grant?
No. Choose your structure for how you'll run your business, not for a grant.
Changing or choosing a legal structure has legal, tax, and ownership consequences. A nonprofit is a different king of organization, with its own rules, filings, and limits on how money is used. Use this rule instead:
- Already planning to form an LLC? Do it for business reasons, then get your EIN, in that order. The IRS says to form your entity with the state before applying for EIN (IRS).
- Considering a nonprofit only for grants? Stop, and talk with an attorney or accountant first.
- Running a charitable project, not a business? Learn how fiscal sponsorship works, which lets an established nonprofit receive grant money on your project's behalf.
What does this look like for a brand-new business?
Here's how one made-up business might map its options.
Hypothetical example. This business isn't real. A home-based bakery, open six months and set up as a single-member LLC, wants money for a commercial mixer.
| Type of funder | Fit | Next step |
| Federal agencies | No: equipment to grow a business | Skip |
| SBIR and STTR | No: not research and development | Skip |
| City small business program | Maybe: open to licensed businesses in the city | Confirm the home occupation permit, then apply |
| Foundations | No: the bakery is a for-profit business | Skip |
| A corporate contest | Maybe | Read the official rules |
The bakery's best move is one local application, plus a look at how grants compare with loans for a piece of equipment it needs soon.
What mistakes should new businesses avoid?
Most mistakes come from skipping the eligibility rules or paying for things that are free.
- Paying a service for an EIN or a SAM.gov registration. Both are free.
- Forming an entity just to qualify for a grant.
- Applying before reading who can apply.
- Assuming "small business" covers any business. Federal programs use the SBA's size standards (Grants.gov).
- Skipping local licenses or permits.
- Trusting "startup grants" lists without checking the funder's own site. The federal government doesn't charge a fee to apply for a federal grant (Grants.gov).
When doesn't this advice apply?
It's written for new for-profit businesses. A few situations work differently.
- Nonprofits and fiscally sponsored projects can reach many foundations that don't fund businesses.
- Research and development startups have a federal path through SBIR and STTR. Start at SBIR.gov.
- Individuals without a business have few options. Most federal opportunities are for organizations, and non provide personal financial assistance (Grants.gov).
- Owners who need money within weeks should look at faster options first, and check whether your business is ready for a grant.
Verify before you rely: eligibility rules differ by program and change from cycle to cycle. Read each opportunity's eligibility section, and ask the funder if anything is unclear.
Frequently asked questions
Can I get a grant to start a business?
Rarely. The SBA says it does not provide grants for starting or expanding a business (SBA), and most federal grants go to organizations. Some state, local, and corporate programs support new businesses, so check their eligibility rules. Most expect your business to be formed and registered first.
Do I need an EIN to apply for a grant?
Often, yes. Many applications ask for a federal tax ID, and federal grants require a SAM.gov registration. An EIN is free from the IRS, which warns never to pay a fee for one (IRS). If you're forming an LLC, register with your state first, then apply for the EIN.
Can a single-member LLC get a grant?
Yes, if the program accepts for-profit businesses. By default, the IRS treats a single-member LLC as part of its owner's tax return unless it elects otherwise (IRS). That affects your tax forms, not whether you're a business. Check each program's list of eligible applicant types.
How long does a business need to be open to get a grant?
It depends on the program. Some require a minimum time in business, and others welcome new businesses. There's no single rule, so read each opportunity's eligibility section before you invest time. If a program you like needs a track record, note its next cycle and focus on programs open to you now.
Can I get a grant as an individual instead of a business?
Rarely for business purposes. Grants.gov says most federal opportunities are for organizations, few are open to individuals, and none provide personal financial assistance (Grants.gov). Some fellowships and awards go to individuals, so check each program's rules. For personal assistance, Grants.gov points people to USA.gov.
Your next step
Want to map which funders your business can reach? Workbook 1: Foundation & Fit walks you through it in exercise 1.6, Your Eligibility Map, then helps you decide whether grants fit at all. It's also part of The Starter Set.
This post is general information, not legal, tax, or financial advice. Eligibility rules vary by program and change, so check current details with the funder or an official source.