Running a small business requires capital, especially when starting out or expanding. Many of Iowa’s small businesses cover their costs using operating income or cash reserves, but sometimes other funds are needed.
Other funding sources can help new start-ups get established, growing businesses expand operations, or any business acquire property, equipment or inventory. For some businesses, other funding might be necessary to pay operating costs following an emergency or disaster.
When additional funds are desired or needed, businesses in Iowa have several ways to pursue acquiring capital. While loans and outside investors are common sources, grants are usually a better option for businesses that can qualify.
The good news is that there are many grants which Iowa businesses may qualify for. The state offers a variety of small business grants, in order to support the small businesses that account for 99% of all its businesses. There also are grants from private companies, nonprofits, the federal government and others.
Whether you’re about to start a business in Iowa or growing an existing one, here are the top 2026 small business grants in Iowa that your business might want to apply for.
What are small business grants?
Small business grants may be awarded by governments, foundations, nonprofits, companies, or other entities. The awards don’t have to be repaid, but are essentially “free money” for the business to use as allowed by the grant. Most grants have specific criteria for applying, and require that funds are used in alignment with the grant’s aims and business’s proposal.
By providing grants, governments and other entities hope to help Iowa’s many small businesses succeed and thrive. A grant might be used to start a business, expand a business, purchase property or equipment, make eco-friendly improvements, serve a specific demographic, or for any number of other purposes.
Grants aren’t the only way for businesses to get a cash infusion, but they’re one of the best. They have multiple benefits compared to other options:
- Commercial Loans: Loans require the repayment of both the principal amount and interest. Grants don’t require repayment, and thus have no interest.
- Business Credit Cards: Credit cards often come with high interest rates, which can greatly dampen cash flow if full payments can’t be made one month. Grants are risk-free, since they’re money that doesn’t need to be repaid.
- Venture Capital: Attracting venture capital usually means giving up a portion of your business ownership to outside investors. Grants don’t require sacrificing ownership.
- Personal Capital: Not all entrepreneurs have personal savings to invest in their businesses, and using personal funds can increase financial risk due to lack of diversification. Grants offer external funding without tapping into your personal finances.
Iowa-specific grants for 2026
Small Business Collateral Support Program
The Small Business Collateral Support Program helps qualifying businesses secure commercial loans when they’re short on collateral. It’s a state collateral pledge, not a grant. These loans can be used for anything from start-up costs and extra working capital, to purchasing supplies or hiring employees.
The state can pledge up to 40% of the collateral gap (the average is closer to 20%) on a commercial loan of $50,000 to $250,000. Most businesses use this to simply qualify for a loan. SBA 7(a), SBA 504, USDA and other government-guaranteed loans aren’t eligible.
Because this is a collateral pledge rather than a grant, fees of 0.5%–1.5% apply, and the collateral deposit is repaid to the state.
To qualify, your business must be a privately owned, for-profit Iowa business with average gross income under $4 million, fewer than 125 employees, and a credit score above 600.
The application process is typically handled by the lender who’s underwriting a commercial loan. Your loan officer should be familiar with the program and know whether you qualify. There’s a spreadsheet of approved lenders and their phone numbers.
Application process: best practices and tips
- Consider this program even if you could get a loan without it. The collateral pledge can help you retain more working capital, and if the loan would be unsecured, making it secured could net you a lower interest rate.
- Work with an in-state commercial loan officer, as they’ll be familiar with the program. A loan aggregator or out-of-state lender might not be acquainted with the program.
- Contact your lender, or the IEDA program contact, Anna Lensing, at 515-348-6199.
Iowa Innovation Continuum
The Iowa Innovation Continuum functions as a publicly funded state venture capital (VC) firm. The continuum doesn’t provide standard grants, but rather makes investments akin to how a VC firm might, through loans or royalty agreements.
The continuum consists of five different funds: Proof of Commercial Relevance (POCR), Demonstration Fund (Demo), IIA Launch Fund, IIA Propel Fund and IIA Expansion Fund. Which fund a business qualifies for depends on what stage of development or growth it’s at. (IIA stands for Iowa Innovation Acceleration.)
Qualifying businesses need to be Iowa companies with fewer than 500 employees developing innovative technology in advanced manufacturing, bioscience or information technology. University technology isn’t required.
Awards are made as secured loans or in exchange for a royalty agreement on future sales (potentially even at early stages before commercialization is proven) and require a 1:1 match. Launch awards go up to $250,000, Propel up to $500,000, and Innovation Expansion up to $1,000,000. A royalty award can provide interest-free capital for research, at a time when other funding is difficult to obtain.
Application process: best practices and tips
- Applications are reviewed on an ongoing basis. Review the fund descriptions on the IEDA Innovation Acceleration Fund page to find the right fund for your company’s stage before applying.
- Even if you ultimately use private investment, receiving an award through this program might give you some leverage when negotiating with outside investors.
Technology Assistance Program at Iowa State University
Iowa’s Technology Assistance Program (TAP) is government-funded, but managed by Iowa State University. The program provides technical assistance and cost-share funding for research projects with Iowa State University faculty.
Participating in the program requires collaborating with researchers at one of Iowa’s public education institutions, namely Iowa State University. A faculty member might provide expertise on materials, engineering, or another aspect of developing new inventions and innovations.
TAP is technical assistance with cost-share funding rather than a traditional grant, and there’s no royalty involved.
Businesses interested in this program should contact the Center for Industrial Research and Service at Iowa State University at 515-294-3420. All applications are handled by the office.
Application process: best practices and tips
- If you’re developing a technology at another school in Iowa, also collaborate with your school’s office for developing technologies. There will need to be collaboration between your team, your school and Iowa State University.
- If you have a private business and no school affiliation, first find a researcher at Iowa State University who’s interested in joining your team. Your application will be stronger if you already have a researcher from the university on board.
Iowa State Trade Expansion Program (STEP) Export Grant
The Iowa Economic Development Authority’s Global Business team administers Iowa’s State Trade Expansion Program (STEP) Export grant, which provides reimbursement funding to help eligible Iowa small businesses expand into international markets. The program is funded in part through a grant from the US Small Business Administration.
Eligible expenses include trade show booth fees and related costs, trade mission participation fees, product compliance certifications for international markets, and website localization for international audiences. Reimbursement rates vary by activity but can cover a substantial portion of eligible costs.
To qualify, your business must be a for-profit company operating a facility in Iowa that manufactures, processes, adds value to, or distributes a product, or provides an exportable service. Your business must also meet SBA size standards, be new to exporting or entering a new international market or promoting a new product, and be in good standing with any previous IEDA programs or grants.
Application process: best practices and tips
Applications must reach IEDA at least 45 days before the event; availability depends on annual funding (current periods run into 2027). Only complete applications are considered, so gather all required documentation before submitting. Contact the IEDA Global Business team directly at opportunityiowa.gov for current program details, eligible activities, and application instructions. Because funding is limited, applying early improves your chances.
Choose Iowa Value-Added Grant
The Choose Iowa Value-Added Grant is administered by the Iowa Department of Agriculture and Land Stewardship and provides financial assistance to Iowa-based businesses that add value to Iowa agricultural products. Eligible projects include processing, manufacturing, packaging, and developing new food or agricultural products for sale in Iowa markets.
This is a matching grant program, recipients are required to match the funds awarded dollar-for-dollar from their own resources. Grants are up to $25,000, require a 1:1 cash match (in-kind contributions aren’t accepted), are paid by reimbursement, and are awarded competitively.
To be eligible, your business must be located in Iowa. Preference is given to small and medium-sized businesses, defined as fewer than 50 full-time employees (small) or 51–250 employees (medium). Membership in the Choose Iowa brand program is not required to apply.
Application process: best practices and tips
The next application window runs from December 1, 2026 to January 15, 2027 (noon), with awards announced in late March 2027. Applications are submitted through the Choose Iowa grant portal at chooseiowa.com/grants. Because this is a competitive program, make sure your project clearly demonstrates how it adds value to Iowa agricultural products and benefits local producers and markets. Office hours are typically hosted in December to answer applicant questions, check the Choose Iowa website for dates.
Choose Iowa Dairy Innovation Grant
The Choose Iowa Dairy Innovation Grant provides financial assistance specifically to Iowa dairy businesses looking to expand or modernize their operations. Eligible projects include expanding or refurbishing existing milk plants, establishing new milk plants or mobile dairy processing units, purchasing or renting refrigeration and freezer facilities or equipment to expand dairy processing capacity, and incorporating technologies that reduce farm labor in milk production and storage, including robotics and computerized systems.
Like the Value-Added Grant, this is a matching grant, recipients must match the funds awarded with their own investment. Grants are up to $100,000 with a 1:1 cash match.
To be eligible, your business must be an Iowa-based dairy operation engaged in one or more of the eligible project types listed above.
Application process: best practices and tips
The 2026 application window ran from March 1 to April 17, 2026 and is now closed. The next round is expected in spring 2027; check chooseiowa.com for dates. Applications are submitted through the Choose Iowa grant portal at chooseiowa.com/grants. Contact the Iowa Department of Agriculture at [email protected] with any questions before applying.
Industry-specific and niche grants
In addition to the more general Iowa business grants, there are several niche programs for qualifying businesses.
WIIN Lead Testing of Drinking Water Grant
The WIIN Lead Testing of Drinking Water Grant helps test drinking water for lead in childcare and childhood educational programs. The program is for public schools and child care programs.
The program covers lead testing, retesting and education, and applications are accepted on a rolling basis.
The application should be completed and submitted to the program coordinator. Contact the Iowa Department of Education (Lyn Jenkins, 515-664-6732).
Historic Preservation Tax Credit: Small Projects
The Historic Preservation Tax Credit helps developers rehabilitate historic buildings throughout the state. The program will pay up to 25% of qualified rehabilitation expenses (QREs) as defined by the Internal Revenue Service. The state program essentially mirrors the federal one.
Qualifying buildings must either be on the National Register of Historic Places, or be determined by the Iowa State Historic Preservation Office to be eligible.
This is a tax credit on state taxes, not a grant, and it’s refundable for tax years 2025 and later. It’s best to work with an accountant, who should be familiar with this credit.
Central Iowa Job Training Program Grant
The Central Iowa Job Training Program Grant provides funds for job training of unemployed and underemployed individuals in one of Central Iowa’s counties. Government agencies, nonprofits, and businesses providing on-the-job training are welcome to apply.
The program is currently closed. $100,000 was identified for FY2024–25, and no new application window has been announced; check Iowa Workforce Development for future rounds. Applications are submitted to Iowa Workforce Development.
Federal grants for Iowa businesses
Businesses that meet certain qualifications can access federal grants across the United States, including those located in Iowa. These grants are often substantial if your business qualifies.
Small Business Innovation Research (SBIR) Program
The Small Business Innovation Research (SBIR) program helps businesses pursue innovations and inventions, with the intention of eventual commercialization. This program is divided into Phases I, II and III, which focus on technical development, prototype development and commercialization. Grants can be anywhere from tens of thousands, to tens of millions for select Phase III grants.
Application and eligibility requirements
SBIR grants are awarded by a number of federal agencies. Check whichever federal agency oversees your industry, to find out more information about SBIR grants that your business might qualify for. The general application process is detailed on the SBIR website.
Small Business Technology Transfer Program
The Small Business Technology Transfer (STTR) program is much like the SBIR Grant Program. The STTR is also for businesses pursuing the commercialization of significant innovations, and it likewise has Phase I, Phase II and Phase III grants.
The main distinction is that the STTR program requires applicants to partner with a nonprofit research institution, such as a university. The SBIR program encourages, but doesn’t require, such partnerships.
Application and eligibility requirements
STTR grants are awarded by a number of federal agencies. Check whichever federal agency oversees your industry to find out more about these grants. The SBIR website is a good source of general STTR application information, too.
Note: 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 active through September 30, 2031.
Small Business Administration Grants
The U.S. Small Business Administration (SBA) supports small businesses through various funding options, including several grant programs (along with loan programs). Programs vary in scope, requirements, criteria and award amount.
Application and eligibility requirements
General SBA grant information is available through the SBA website. For more specific information, contact the SBA Iowa District Office in Des Moines.
Corporate and private foundation small business grants for 2026
A range of companies and private foundations have their own small business grant programs. Some are focused on diversity, technological innovation, economic development, sustainability or something similar, while others are more general.
Freed Fellowship Grant
The Freed Fellowship awards a $500 micro-grant each month to a U.S.-based small or micro business. Monthly winners are also eligible for a year-end grant of $2,500.
Application and eligibility requirements
To apply, visit the Freed Fellowship Grant page. The deadline for each month’s application is the last day of that month, but you can reapply in subsequent months if needed. The application fee is $19.
Conclusion
Many different Iowa business grants are available, including the ones listed and numerous others. Check which ones your business qualifies for, and be sure to apply for any that could help. You might win an award that helps take your business to the next level.
If you’re budgeting for a new business, see our breakdown of the costs of forming and running an Iowa LLC.