Top Small Business Grants in Tennessee for 2025

Tennessee has over 690,000 small businesses that make up the majority of the state’s economy. These businesses provide invaluable jobs and development projects vital to local communities.

Unfortunately, increasing costs, supply chain issues, and limited resources make staying competitive in an ever-changing market challenging. Many small business owners find traditional financing options too risky, especially when they are just starting out and already incurring seemingly endless costs out of pocket. The thought of taking on debt in addition to all the other costs of running a business can be overwhelming. If you are still in the early stages, learning how to start a small business can help you set a strong foundation before you seek funding.

Small business grants offer a significant advantage where traditional loans fall short. Grants are free funding because they don’t require repayment like loans do. The primary goal of small business grants is to help small business owners grow and sustain their businesses while boosting local economies. Whether you are expanding your farm, growing a tech company, or launching a startup, there are several grants available to get your business off the ground.

If you’re interested in small business grants in Tennessee, here are some of the options available for 2025.

What are small business grants?

Small business grants are financial awards not only for startups but also for established businesses intended to grow their customer and client bases, improve their products and services, and problem-solve.

A grant is preferable to a loan because the business owner doesn’t have to pay back grant money. Loans, on the other hand, keep you on the hook not only for balance repayment but also for interest. In some cases, loan companies will encourage business owners to trade equity for additional funding. (This is called venture capital). Interest and venture capital can accrue significantly over time and sometimes hurt businesses more than they help.

Grants are available through several sources:

• Federal and state governments: often tied to economic development, research, or community impact.
• Corporations & private programs: companies like FedEx or Visa offer grant contests and funding competitions.
• Nonprofits & foundations: often focus on underserved communities or industries like the arts, healthcare, or sustainability.

If you are a new entrepreneur in Tennessee, acquiring grants can be beneficial for testing new ideas or expanding your space, products, or services without incurring additional debt. When you qualify, they can also help to rejuvenate your business when it feels that things have grown stagnant or you are struggling to bring in new customers or clients.

Tennessee state-specific small business grants for 2025

Tennessee offers state-specific grants intended to strengthen local businesses, create jobs, and promote long-term growth. Many of these programs focus on bolstering minority- and women-owned businesses and rural economic development. The grantors recognize that the more entrepreneurs succeed, the more we all benefit, and they want to give available funds to small businesses that serve their causes and move forward with ideas they can put their faith in.

The following are some of the top grant opportunities in Tennessee:

Tennessee Minority-Owned, Women-Owned, and Small Business Development Program

The Tennessee Department of General Services runs this program to support minority-owned, women-owned, and small businesses (MWBEs). It helps these small businesses acquire state contracts and, in some cases, provides financial support to cover certification or operational needs.

Application and eligibility requirements:

• Businesses must be certified as minority- or women-owned through the Governor’s Office of Diversity Business Enterprise (Go-DBE).
• Applicants need a valid business license and should meet the state’s definition of a small business.

Tennessee Department of Economic and Community Development (ECD) grants

The Tennessee Department of Economic and Community Development (ECD) offers grants that help businesses create jobs, boost rural development, and encourage private investment. Programs like FastTrack Infrastructure Development and FastTrack Job Training Assistance can provide financial support to companies expanding in the state.

Application and eligibility requirements:

• Applications are made in partnership with local communities.
• Businesses must demonstrate job creation and investment potential.

Launch Tennessee (LaunchTN) SBIR/STTR Matching Fund

LaunchTN is a public-private partnership that helps Tennessee entrepreneurs, especially in tech, life sciences, and advanced manufacturing. The SBIR/STTR Matching Fund Program offers state-level funding to businesses that have already secured federal SBIR or STTR grants.

Application and eligibility requirements:

• Businesses must be Tennessee-based and have received a federal SBIR/STTR award.
• Funds can be used for commercialization, R&D, or scaling.

Tennessee Industry-Specific and Niche Grants

Tennessee also offers industry-focused grants, especially in agriculture, healthcare, and technology. These niche grants target specific sectors that are crucial to the state’s economy.

Tennessee Agricultural Enterprise Fund (AEF)

The Agricultural Enterprise Fund (AEF) provides grants to agricultural businesses and farmers looking to expand, improve infrastructure, or add value to their operations.

Application and eligibility requirements:

• Applicants must demonstrate how their project supports rural development and benefits local farmers.
• Typical awards range from $10,000 to $50,000.

2. Tennessee Rural Business Development Grants

These grants, managed by USDA Rural Development Tennessee, target small businesses in rural areas, supporting initiatives such as business expansion, workforce development, and equipment purchases.

Application and eligibility requirements:

• Available to businesses located in Tennessee’s rural counties.
• Must demonstrate community or economic impact.

Tennessee Technology Development Grants

Through partnerships with local innovation hubs and universities, Tennessee supports startups in biotech, healthcare, and advanced manufacturing with research and commercialization funding.

Application and eligibility requirements:

• Applicants must be Tennessee-based startups in approved tech fields.
• Programs are often managed in partnership with LaunchTN.

Federal Grants Available to Tennessee Businesses

Federal grants are another strong funding option for Tennessee small business owners. These programs support research, innovation, and business growth across the U.S., meaning Tennessee businesses are eligible to apply.

Here are the top federal small business grants to examine:

Small Business Innovation Research (SBIR) Program

The SBIR program funds small businesses conducting high-tech research with strong commercialization potential. Grants can be used to test ideas, develop prototypes, and bring products to market.

Application and eligibility requirements:

• Apply through specific federal agencies such as the Department of Defense, NIH, or DOE.
• Businesses must be for-profit and U.S.-based with fewer than 500 employees.

Small Business Technology Transfer (STTR) Program

The STTR program encourages collaboration between small businesses and nonprofit research institutions. Like SBIR, it funds R&D but requires a formal research partnership.

Application and eligibility requirements:

• Must partner with a U.S.-based research institution.
• Submit proposals through participating federal agencies.

Small Business Administration (SBA) grants

While the SBA is best known for loans, it also provides grants for community development, veteran-owned businesses, and export assistance.

Application and eligibility requirements:

• Check specific grant opportunities through the SBA website.
• Programs vary by industry and business type.

State Trade Expansion Program (STEP)

The STEP grant helps Tennessee businesses expand into international markets. Funds can be used for trade shows, marketing, or product adaptation.

Application and eligibility requirements:

• Businesses must be small, for-profit, and U.S.-based.
• Applications run through LaunchTN.

Corporate and private foundation small business grants for 2025

Corporate and private foundation grants are offered by businesses and nonprofit groups to empower small business owners. These programs focus on a wide range of initiatives, including, but not limited to, diversity and unique innovations.

Here are some opportunities for Tennessee small business owners:

FedEx Small Business Grant Contest

Headquartered in Memphis, FedEx runs one of the most recognized small business grant competitions. In 2024, FedEx awarded over $300,000 in grants, including a $50,000 grand prize.

Application and eligibility requirements:

• U.S.-based, for-profit small businesses with fewer than 99 employees can apply.
• Requires a FedEx business account and use of FedEx shipping services.

Visa Everywhere Initiative

The Visa Everywhere Initiative is a global innovation challenge supporting startups tackling payment and commerce issues. Winners receive funding, mentorship, and access to Visa’s network.

Application and eligibility requirements:

• Open to FinTech and payment-related startups.
• Apply online through Visa’s platform.

Freed Fellowship Grant

The Freed Fellowship awards a $500 micro-grant monthly to a U.S.-based small business owner, plus a chance at a $2,500 year-end prize. Winners also receive business strategy support.

Application and eligibility requirements:

• Open to U.S.-based small and micro-businesses.
• Rolling applications accepted monthly.

Other Private Grants

Other opportunities include Hello Alice, Comcast RISE, and the Amber Grant for Women, which frequently open small business grant programs available in Tennessee.

Tennessee small business grant application process: best practices and tips

No matter which grant you pursue, the process can seem overwhelming. Use these tips to improve your chances:

• Research thoroughly: Each grant has unique eligibility requirements—make sure you’re a match before applying.
• Start early: Applications can be time-consuming. Don’t wait until the deadline.
• Tailor your proposal: Align your business goals with the funder’s mission.
• Get your documents ready: Have financial statements, a solid business plan, and tax records on hand.
• Tell your story: Grantors want to see the impact your business will have on your community and industry.
• Ask for help: Tennessee’s Small Business Development Centers (SBDCs) and LaunchTN offer free resources to guide you.
• Polish before submitting: Review everything for clarity and accuracy.

Conclusion

Securing additional funding can increase the resilience of Tennessee’s small businesses and make the difference between success and failure.

Small state or industry-specific grant programs offer the most realistic opportunities with limited competition. However, even though federal grants may feel out of reach, if your small business meets the application qualifications, don’t hesitate to apply. Never overlook private and corporate grant contests because they are valuable ways to obtain both money and visibility.

No matter what type of small business you own, Tennessee has grant opportunities waiting for you and other entrepreneurs. With these tools to aid your search, you can take the first steps toward growing your business.