As an entrepreneur, you know that one of the largest hurdles between you and success is funding. Capital investment is crucial for starting a small business in Illinois and getting it off the ground, but not all funding resources are equally helpful. Business loans and credit cards come with substantial interest rates and fees, and taking on too much debt could spell doom for your company.
Instead, a better opportunity is to apply for an Illinois small business grant. Grants are excellent for small businesses because they don’t need to be repaid, and they can provide much-needed capital to manage operations or expand into new markets. Illinois has various small business grant programs to help you thrive. We’ve compiled a list of the top grant opportunities for Illinois business owners in 2026.
What are small business grants?
Small business grants are a type of funding provided by either the government or a private enterprise. The purpose of a small business grant is to help entrepreneurs with projects designed to strengthen, expand, or upgrade their businesses. Some grants are designed to help startups get off the ground, while others are meant to help existing businesses overcome struggles and obstacles.
In almost all cases, a small business grant is tied to a particular type of project or investment opportunity. For example, a grant may be designed to help companies update their technology so they can streamline customer orders and transactions. A different grant may be geared toward helping a business export its products overseas to be more competitive internationally.
Applying for and receiving grant money can be time-consuming, and there is always stiff competition from other entrepreneurs. However, the main benefit of grant money is that it doesn’t have to be repaid like a loan. Also, some grants are much more flexible than others, meaning you can spend the money at your discretion rather than on specific infrastructure, equipment, or projects.
Illinois state-specific grants for 2026
Most statewide grants are available through the Illinois Department of Commerce and Economic Opportunity (DCEO). While there are some grants available to small businesses, most of the funding provided is designed for community development and improvement. If your business can assist with development like building infrastructure or providing affordable housing, you may be able to access multiple grants.
Instead, cities like Chicago and Urbana have their own small business grant programs. Since Chicago is the largest city in the state, many business owners may decide to set up shop within the city limits to take advantage of these grants. Here are some of the top opportunities available to Illinois entrepreneurs.
1. Illinois Grocery Initiative
The Illinois Grocery Initiative, authorized by Public Act 103-0561, addresses food insecurity across Illinois by offering two distinct grant programs for grocery businesses.
The New Stores in Food Deserts Program provides competitive grants to support the establishment of new grocery stores in areas identified as food deserts — census tracts with high poverty rates and limited access to fresh food. Grants cover eligible capital and non-capital costs including building construction or renovation, equipment, and first-year operational expenses. Awards are substantial, with recipients receiving anywhere from $150,000 to several million dollars depending on project scope. A 1:3 cash match is required (meaning the grant covers up to 75% of project costs). To be eligible, your business must be an independently owned for-profit, cooperative, or nonprofit grocery store with fewer than 500 employees and no more than five existing grocery locations. DCEO expects to open a third round of this program in 2026.
The Equipment Upgrades Grant Program provides grants to help existing independent grocery stores invest in new energy-efficient equipment. Unlike the New Stores program, this program is not limited to food deserts — it is available to any independently owned for-profit, cooperative, or nonprofit grocery store in Illinois with fewer than 500 employees and no more than four locations. This is a rolling program; check the DCEO website at dceo.illinois.gov for the current status and application window.
Application Process
Both programs are administered by DCEO. Applications are submitted through the DCEO grant portal at dceo.illinois.gov. DCEO has partnered with Chicago State University and Western Illinois University to provide free technical assistance to prospective applicants — reach out before applying to strengthen your submission.
2. Community Development Block Grant Economic Development Program
The key to a strong and vibrant economy is high-paying jobs for citizens. This grant program is designed to help businesses create and retain high-paying jobs in areas where economic development is slow or nonexistent. The grant states that the funds are to be used for job development in “non-metropolitan areas.” So, if you’re based in Chicago or another big city, you cannot apply.
Grant funds can also be used to help with infrastructure projects designed to boost local economies. Grant recipients can get between $200,000 and $1 million for these projects.
Application process
Find out more about how to apply and what specific projects qualify on the DCEO website.
3. Chicagoland Chamber of Commerce Grants
Chicago has one of the most active local small business grant ecosystems in the country, with programs administered through the City of Chicago’s Department of Business Affairs and Consumer Protection (BACP) as well as through various neighborhood-level Community Development Organizations (CDOs). Programs change regularly and vary by neighborhood, industry, and funding cycle. Some focus on facade and storefront improvements, others on technology upgrades, and others on general operating support for businesses in designated commercial corridors.
To see what’s currently available, visit chicago.gov/city/en/depts/bacp.html or contact the Chicago BACP directly. You can also check with your local aldermanic office, as many ward-level grant programs are available to businesses in specific neighborhoods.
4. Illinois Innovation Voucher Program
The Illinois Innovation Voucher Program is an active, competitive grant program administered by the Illinois Department of Commerce and Economic Opportunity (DCEO) in partnership with the Illinois Science & Technology Coalition (ISTC). It provides grants of up to $75,000, covering up to 75% of eligible research costs, to help Illinois small businesses pursue R&D projects in collaboration with Illinois universities and research institutions.
The program is designed to accelerate technology development and strengthen the commercialization of new innovations. Eligible industries include agribusiness and agtech, energy, information technology, life sciences and healthcare, manufacturing, and transportation and logistics. To qualify, your business must be Illinois-based and partner with an Illinois nonprofit institution of higher education for the research project.
The program has been highly active, in early 2026 alone, DCEO awarded $2.4 million to 34 companies across the state, with an additional $2.6 million available in the current third round. Applications are accepted on a rolling basis until funds are exhausted.
Application process
Applications are submitted through the Illinois Innovation Voucher Program portal at ilinnovoucher.istcoalition.org. Contact ISTC or your nearest SBDC International Trade Center for guidance before applying. Because awards are made on a rolling basis, applying early in the funding cycle significantly improves your chances.
Federal grants available to Illinois businesses
Chicago has one of the most active local small business grant ecosystems in the country, with programs administered through the City of Chicago’s Department of Business Affairs and Consumer Protection (BACP) as well as through various neighborhood-level Community Development Organizations (CDOs). Programs change regularly and vary by neighborhood, industry, and funding cycle. Some focus on facade and storefront improvements, others on technology upgrades, and others on general operating support for businesses in designated commercial corridors.
To see what’s currently available, visit their website or contact the Chicago BACP directly. You can also check with your local aldermanic office, as many ward-level grant programs are available to businesses in specific neighborhoods.
1. Small Business Innovation Research (SBIR) Grant
If you’re focused on developing new technology, the SBIR grant is designed to give you non-dilutive (meaning you control the rights to your product) funding. This grant is powered by the Small Business Administration (SBA), but it’s not funded by the Administration. Instead, you receive funds from various government agencies based on what kind of research and development they’re looking for. For example, the Department of Defense may want military-grade technology, while the Department of Agriculture will likely want projects focused on food engineering and farming.
The SBIR is divided into three phases, and you can receive funding from each phase. Phase 1 lasts between six and 12 months, and it’s where you develop your proof of concept. Phase 2 lasts two years, and it’s where you develop and refine your technology to make it commercially viable. Finally, Phase 3 has no specific timeline, but it’s where you take your product to the public or the federal agency marketplace.
Application process
To apply, you must submit paperwork to the agency supplying funding. Each agency solicits SBIR applications at different times with different project scopes, so you must be proactive about looking for these opportunities. The specifics of each application process will vary, as will deadlines and review periods.
2. Small Business Technology Transfer (STTR) Grant
The STTR grant is another part of the SBIR program. In fact, both grants are often awarded by the same agencies. When you browse through the list of government entities, each one will state whether it participates in one or both programs.
The primary difference between the SBIR and STTR grant is that you must have a partnership with a non-profit research organization for STTR. The goal is to provide research facilities with the means to make their developments commercially viable. Alternatively, if you have an R&D project but not the resources to explore it, you can partner with a non-profit to help you realize your vision.
Application process
The application process is the same as SBIR, but you must provide proof of a relationship with a research facility or organization. Again, each agency posts unique solicitations with different project scopes, funding limits, and deadlines.
Note: The SBIR and STTR programs lapsed on September 30, 2025, after Congress missed the reauthorization deadline. Both programs were reauthorized in March 2026 and are now active through September 30, 2031.
3. State Trade Expansion Program (STEP) Grant
This grant is also powered by the Small Business Administration, but its goal is to help small businesses expand their reach to international markets. Because it’s expensive to setup import/export infrastructure, a STEP grant funds all developments necessary to achieve success. For example, you can use funds to travel overseas to establish relationships with foreign distributors, develop foreign marketing campaigns, and upgrade your e-commerce site for overseas customers.
Application process
In Illinois, you can participate in the ISTEP program. However, to apply for grant funding, you must connect with a local Small Business Development Center International Trade Center or a Department of Commerce OTI trade specialist. These organizations can help you fill out the application and determine what your business needs to expand to foreign markets.
Corporate and private foundation grants for 2026
Although there are tons of government grants available, they can be slow and complicated. Instead, it might be better to secure grant funding from a corporation or private foundation. The benefit of private grants is that they’re often easier to access. Also, depending on the type of grant, there might be fewer restrictions or limitations on how you can use the money.
While there are tons of private business grants, here are some of our top recommendations.
1. FedEx Small Business Grants (CLOSED)
Each year, FedEx awarded multiple grants for small businesses that already have a FedEx business account. The top winner recieved $50,000, while nine second-place winners received $20,000 each.
The FedEx Small Business Grant Contest ran from 2012 through 2024 and is no longer accepting applications. We recommend checking the FedEx Small Business resources page for any future programs or new grant opportunities they may announce.
2. Visa Everywhere Initiative Competition (CLOSED)
Fintech is a growing industry, especially as globalization connects businesses and marketplaces from different countries and regions. The Visa Everywhere Initiative was an annual competition that allowed small Fintech companies to showcase their products and innovations for making the industry run more smoothly.
The US-based Visa Everywhere Initiative competition is no longer running. The only active Visa Everywhere program in 2026 is limited to female entrepreneurs with refugee backgrounds based in Europe and is not open to US applicants.
3. Venmo Small Business Grants
Venmo has become a fast and reliable payment processor for small businesses. The Venmo small business grant awards $20,000 to 10 different companies annually. The money can be used for virtually anything, but it’s designed to help these brands expand their market share and improve their bottom lines. To be eligible, your business must have an active Venmo Business Profile in good standing, employ 10 or fewer people, generate less than $50,000 in annual revenue, and have made at least $500 in sales in the three months prior to applying.
The program does not run on a fixed annual schedule, it skipped 2025 entirely. The most recent round ran in May 2024. Monitor their website for announcements about future application windows.
Conclusion
As you can see, grant funding can be a powerful tool to launch or expand your small business. The more proactive and detailed you are with your grant proposals and applications, the more likely you’ll be accepted. Now is the time to start planning your next business projects and determining which grant opportunities align with your company the most. Good luck!