Grants for Struggling Businesses: 6 Truths About What Exists in 2026

Here’s the reality: grants for struggling businesses are rare. While the Small Business Administration (SBA) does offer grant money, it’s not typically aimed at existing businesses struggling to pay bills. The SBA itself does not provide grants to for-profit small businesses for start-up or expansion capital. It’s easy to go down the rabbit hole of searching the internet for assistance that does not exist. And because federal grants to established businesses are so rare, bad information about grants has persisted for years. Unless you’re developing a cutting-edge technology or working for an important federal goal, it’s highly unlikely the U.S. government will be able to help you with your debt.

By far the most well-known SBA grants are those for scientific and engineering R&D. These SBA grants take the form of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Generally speaking, only high-tech, science-focused companies are eligible for such grant funding. These programs are meant to be R&D money, not money to keep the lights on.

When grants are available, they’re given to other entities - like state governments, universities, and various types of nonprofits. That money is then used to fund organizations that serve entrepreneurs in your community. Grants to intermediaries include support for small business development centers (SBDCs). These “indirect” SBA grants support organizations that help many more small business owners through their guidance, resources, and expertise. But SBDCs do not have a bag of federal money to give away. Likewise, SBA grants for veteran-owned businesses are not set up to provide quick emergency capital to veterans. They typically fund organizations that help vets succeed in business. The Veterans Business Outreach Centers (VBOC) is a prime example of how SBA grants are typically distributed.

The SBA does help some exporters through grants through its State Trade Expansion Program (STEP) program, which is federally funded but generally administered by state governments. Only states or similar entities - like U.S. territories - are eligible for STEP grants. This program provides small business owners with financial awards and assistance to help them succeed in the international export arena. STEP grant money can cover various export related expenses, including trade missions, fees for translation of international materials, trade show exhibits, and export training workshops. Unfortunately, if you don’t run a pre-existing small business, you won’t be eligible.

Disaster Loan

If you can show you were adversely affected by a disaster, the SBA has a loan fund in place to help you. But these loans are not grants and must be repaid. The combined limit for SBA Economic Injury Disaster Loan money plus physical damage loan proceeds cannot be more than $2 million. Falling sales on their own do not make your business eligible for a disaster loan.

All the COVID EIDL money has to be repaid because forgiveness is not part of the program. Eligible borrowers can cut payments by 50% for six months, once every five years. That can be a big relief for borrowers, but again it doesn’t erase any debt. Meanwhile, interest keeps accumulating on all these loans. After the six months end, the borrower must resume full repayment. At 90 days past due, you can’t get this relief. If your account is considered “seriously delinquent” which would be after 120 days have passed since your first missed payment, then you’ll have an even bigger problem. Seriously delinquent debt can be sent to Treasury for further collection actions.

Never Ever Pay to Access What’s Already Free

There’s an industry based on confusing entrepreneurs about where to get federal grants. These companies are looking to capitalize on your confusion (and your thirst for support). There are entire companies devoted to taking your credit card number and promising a detailed list of sources of money. Offers to help you get “free” grant money if you pay up front are often scams. If anyone ever asks you for payment to reserve a grant they claim to know about, please be aware they are attempting to defraud you.

Applying for and getting a government grant requires time and attention to detail. You won’t receive a surprise notice of a grant you never applied for. Genuine government representatives will communicate with you formally using official government contact information. The SBA only writes from addresses ending in @sba.gov. Grants.gov is the official place to find a listing of all federal grant opportunities. If someone asks you to “sign up” to see a list of grants offered by the federal government, run in the opposite direction. Here’s my rule: never ever pay to access what’s already free.

You must be registered with SAM.gov before applying for a federal contract or government grant. Instead of paying, take a minute to head to this website, which is free, to register. It must be renewed every 365 days.

Concentrate Your Efforts on What Is Available

Instead of trying to locate grants that don’t exist, you should concentrate your efforts on what is available. Start by getting some free help. An SBDC mentor can give you one-on-one mentoring to help you find ways to reduce your fixed costs, improve revenues, run the numbers to understand your business expenses, and sort out ways to pay down debt.

The bottom line: there is no government magic bullet to make your debt disappear. Filling your debt gap with government grants is not an option for most business owners. Spending even an hour trying to find imaginary grant money you’ll never access is one step further away from your goal. And if you fall prey to a federal grant scam, it could make your situation even worse.