As an entrepreneur, you know that one of the largest hurdles between you and success is funding. Capital investment is crucial for getting your business 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 2025.
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.
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.
A “food desert” is an area where people live that lacks high-quality grocery stores and other food outlets. Instead, these “deserts” have low-quality options like convenience and dollar stores, forcing residents to travel far for healthy food (if they buy it at all).
This initiative is designed to identify food deserts and spur the development of grocery stores and other food outlets to help community residents have better access to healthy meals. Grant recipients can get between $150,000 and 2.4 million to cover startup and operating costs for the first year.
So, if you’re interested in starting a grocery store or similar business venture and you want to help the community in a food desert, this grant may be an excellent way to offset much of your startup costs. If you have an existing grocery store or food outlet, you may be able to use this grant to expand into areas with food scarcity.
You can learn more about how to apply for this grant on the DCEO website. The site also provides helpful tips for getting approved, such as double-checking your paperwork and ensuring your company’s mission statement aligns with the goal of the grant.
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.
Find out more about how to apply and what specific projects qualify on the DCEO website.
The city of Chicago offers multiple small business grants, which you can read about online. Some grants are designed to help building development and infrastructure. Other grants are meant to help established businesses upgrade their technology and equipment. Most of these grants are available annually, with some having a rolling application (meaning you can apply anytime).
If you want an exhaustive list of federal grants available for small businesses, you can conduct a full search on the website Grants.gov. There, you can find grants for all kinds of business across all different sectors, including agriculture, defense, infrastructure, and more. Because there are thousands of grants available, it’s imperative to know which industry and which agency to look at when curating your list.
Beyond the Grants.gov website, here are three common federal grants that can help small business owners in Illinois.
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.
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.
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.
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.
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.
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.
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.
Each year, FedEx awards multiple grants for small businesses that already have a FedEx business account. The top winner gets $50,000, while nine second-place winners receive $20,000 each. Based on past recipients, FedEx prefers companies that have strong values and are committed to supporting the local community.
Fintech is a growing industry, especially as globalization connects businesses and marketplaces from different countries and regions. The Visa Everywhere Initiative is an annual competition that allows small Fintech companies to showcase their products and innovations for making the industry run more smoothly.
The primary benefit of participating in the competition is that you can promote your brand to companies and markets worldwide. While Visa does award monetary prizes to the winners, the goal is to expand your brand reach and grow your bottom line. Even if you don’t take the top spot, the exposure and networking opportunity is significant.
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.
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!
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