Small businesses account for 99.4% of all companies in Alabama, and they are the driving force of the state’s economy. For this reason, there are numerous efforts taken to support people starting small businesses in the state, and offering small business grants is one of the most impactful of those efforts.
With small businesses in Alabama facing headwinds like rising costs and economic uncertainty, there are plenty of cases where they may need a cash infusion. This is where small business grants come in, providing businesses with a lump sum of cash they can use to fund their ventures, whether that means growing an existing company or starting an LLC in Alabama.
To help small business owners in Alabama get the grants they need to start and grow their businesses, we’ve put together a complete guide to small business grants in Alabama. Below, you’ll find helpful information on how small business grants work, the top small business grants for 2026 in Alabama, and how to apply for them.
What are small business grants?
Small business grants are simply funds that are awarded to businesses to support their growth and development. Unlike loans (which have to be paid back with interest) or venture capital funding (which requires giving up equity in your business), small business grants don’t come with any strings attached. They don’t have to be paid, and they are the equivalent of free money for the businesses that are fortunate enough to receive them.
Small business grants can come from federal and state governments, private corporations, or nonprofit organizations. They often focus on specific goals and are awarded to the businesses that are aligned with those goals. For example, some grants strive to support minority-owned businesses while others focus on revitalizing the local economy in a specific area.
Alabama state-specific grants for 2026
Alabama offers several state-specific grant programs to support small businesses. These grants are designed to support job creation and economic development in the state, and they are targeted toward a variety of industries and needs. This includes grants designed to foster innovation and new technological developments and grants that support out-of-state trade:
1. Innovate Alabama Supplemental Grant Program
The Innovate Alabama Supplemental Grant Program is intended to support projects that expand research and development in the state. This grant is awarded to businesses involved in technological innovation or scientific research, and it provides additional funding to businesses in Alabama that have already received a Federal Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) grant.
For businesses that have received a Phase I award, the Innovate Alabama Supplemental Grant Program provides 50% of the SBIR/STTR grant amount (up to $100,000). For those that have received a Phase II award, the program provides 50% of their federal grant amount up to $250,000.
Since the program was started, the Innovate Alabama Supplemental Grant Program has awarded more than $17 million to 98 small businesses in the state.
Application process
To apply for the Innovate Alabama Supplemental Grant Program, you first need to have received a Federal Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) grant. If your business is the beneficiary of one of these federal grants, you can apply for additional funding through the Supplemental Grant Program page on the Innovate Alabama website. Applications are currently closed, so check the program page for details on the next round.
2. Alabama State Trade Expansion Program
The Alabama State Trade Expansion Program (STEP) Grant is designed to support small to medium-sized businesses that export products outside the state. The grant’s funds are used to help Alabama businesses pay for eligible export marketing expenses, and these expenses must be pre-approved before the grant is awarded.
Funds for the Alabama STEP grant are made available thanks in part to a grant from the Small Business Administration (SBA). However, the program is managed at the state level by the Alabama Department of Commerce.
Application process
Information about the Alabama State Trade Expansion Program (STEP) Grant is available on the Made in Alabama website, and you can request more info and apply by sending an email to [email protected]. To be eligible for this grant, your business must meet the following criteria:
- Must be a small business in accordance with SBA size standards
- Must be a for-profit business headquartered in Alabama
- Must have been operating in Alabama for at least 12 months
- Must be export-ready, exporting U.S.-origin goods or services (or goods with at least 51% U.S. content)
- Cannot be barred from receiving federal funds, and must be in good standing with the Alabama Department of Revenue
- Must understand the costs associated with exporting, such as freight forwarding, customs brokers, packing, and shipping
Federal grants available to Alabama businesses
In addition to state programs, Alabama businesses can take advantage of federal grant opportunities. These programs are often competitive and targeted toward specific industries such as technology, healthcare, or rural development.
These grants are managed by various federal agencies and are typically made available to businesses in all states (which is part of what makes them so competitive). However, federal grants can still serve as an excellent source of funding for Alabama small businesses, and honing your application will help improve your chances of being chosen.
While there is a wide range of federal grants available to Alabama businesses, here are a few of the bigger and more popular programs:
1. Small Business Innovation Research (SBIR) Program
This is a program that we’ve mentioned already, and it provides funding to small businesses that are engaged in research and design projects. The program is particularly geared toward businesses in the technology, defense, and healthcare industries, but any business that’s working on developing new innovations can apply.
The SBIR Program operates in three phases:
- Phase I: Awards of roughly $300,000 or less to test the feasibility of a project.
- Phase II: Awards of roughly $2 million or less to develop and test prototypes.
- Phase III: Focuses on commercialization but does not provide additional SBIR funding.
Exact award caps vary by agency and are adjusted periodically, so check SBIR.gov for current amounts. If your business is awarded this grant, be sure to keep in mind the Innovate Alabama Supplemental Grant Program that we covered earlier, as this program awards additional funding to SBIR grant recipients.
Note: Federal authorization for the SBIR and STTR programs lapsed on September 30, 2025, after Congress missed the reauthorization deadline. Both programs were reauthorized on April 13, 2026, and are now authorized through September 30, 2031.
Application process
To be eligible for an SBIR grant, you have to be a for-profit small business with fewer than 500 employees. Your business also needs to be engaged in a research or development project with a strong potential for commercialization. Applications are submitted through participating federal agencies such as the Department of Defense or the National Institutes of Health. For submission deadlines and application resources, you can visit SBIR.gov.
2. Small Business Technology Transfer (STTR) Program
This program is similar to the SBIR program, except that it provides grants to small businesses that are actively working with research institutions. The program is designed to encourage partnerships between innovative small businesses and non-profit research organizations.
The STTR program operates in the same three phases as the SBIR program, and the grant amounts are the same as well. Like SBIR recipients, recipients of an STTR grant in Alabama are also able to apply for additional funding through the Innovate Alabama Supplemental Grant Program.
Note: Federal authorization for the SBIR and STTR programs lapsed on September 30, 2025, after Congress missed the reauthorization deadline. Both programs were reauthorized on April 13, 2026, and are now authorized through September 30, 2031.
3. USDA Rural Business Development Grants
The U.S. Department of Agriculture (USDA) offers grants to promote economic development and job creation in rural areas. These grants typically range from $10,000 to $500,000, depending on the project’s size and its potential impact on the area’s economy.
Application process
Businesses can’t apply for a USDA Rural Business Development Grant directly. The grants go to rural towns, public bodies, nonprofits, tribes, and similar organizations in areas with a population under 50,000, which then use the money to help small businesses in their community through training, technical assistance, loan funds, and similar support. If you’re a rural Alabama business owner, ask your local economic development organization whether it runs an RBDG-funded program. You can learn more on the USDA Rural Business Development Grants page.
Corporate and private foundation grants for Alabama businesses
Not all small business grants come from government agencies. In addition to public funding, small businesses in Alabama can also secure grants from private organizations. Private grants are often offered by non-profit organizations and foundations, but many for-profit organizations offer grants as well as a way to give back to their communities.
1. Amber Grant for Women
The Amber Grant supports women entrepreneurs. WomensNet awards $15,000 Amber Grants every month, and three of each year’s monthly winners receive an additional $75,000 year-end grant. This grant is available to women-owned businesses across all industries.
Application Process
The application process for the Amber Grant is straightforward, requiring only a short description of you and your business, plus a $15 non-refundable application fee. You can visit the Amber Grant website to learn more and submit your application.
2. Verizon Small Business Digital Ready Grant
The Verizon Small Business Digital Ready Grant is a national grant program run by Verizon in partnership with LISC (Local Initiatives Support Corporation), a nonprofit with decades of experience supporting small businesses across the country. The program awards $10,000 grants to small businesses throughout the year and is open to for-profit businesses in all 50 states, including Alabama.
What sets this grant apart is its low barrier to entry. To unlock the application, you simply need to create a free account on Verizon’s Small Business Digital Ready platform and complete any two eligible courses or events, which can be done entirely online. The platform itself is a valuable resource, offering hundreds of free on-demand courses, expert-led coaching sessions, and peer networking opportunities designed to help small businesses grow in the digital economy.
Since 2021, Verizon and LISC have awarded more than $15 million in grants through this partnership to small businesses across the country.
Application process
To apply, create a free account and complete any two eligible courses, virtual events, or in-person events on the platform. Once those are completed, the grant application will be unlocked. In 2026, Verizon is selecting 10 businesses per month from June through December. If you are not selected in a given month, your application remains under consideration for the remainder of the year, and all applicants receive a final decision by January 12, 2027.
Conclusion
For small businesses in need of funding, small business grants are an excellent option to pursue. While many of these grants are competitive and only awarded to a handful of businesses each year, the benefits if your business is chosen as a recipient are well worth the effort it takes to apply.
In Alabama, small businesses have access to a range of grants issued by state and federal agencies as well as private foundations and corporations. The list of grants we’ve covered in this article is by no means exhaustive, and we encourage you to research what other grants might be available to your business depending on its industry and other qualifications.