Page written by Chris Godfrey. Last reviewed on September 4, 2024. Next review due October 1, 2025.
Business grants are effectively free money – there’s no need to repay the funds if you use them as you said you would – and they’re a great way for Illinois entrepreneurs to launch or finance a business or create opportunities to support their community.
Illinois has no shortage of small business grants and they come in many shapes and sizes, which means finding the right grant for you may require some homework. Here are the best places to begin your search:
The Illinois Department of Commerce and Economic Opportunity (DCEO) has provided a $14.7million funding pot for ‘opportunity zones’ across the state – in Chicago and beyond. Opportunity Zones provide an incentive for investors to invest in local projects for a temporary tax deferral and are targeted to areas in Illinois that need investment to help create jobs and business investment. Small businesses can apply for funding up to $250,000 through the DCEO or the Chicago Office of Planning and Development.
The Urbana Economic Development Division administers several programs aimed at supporting new and existing businesses and commercial developments. These programs include economic incentives in the form of business grants and redevelopment funding. Grant awards range from $3,000 up to $35,000 depending on the type of project. To qualify, your business or project must be located within designated Enterprise Zones in the City of Urbana.
The Illinois Department of Commerce and Economic Opportunity (DCEO) provides a $5million grant-matching program for businesses that have received federal funding through the US Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs. Applications are currently being accepted from businesses who have previously received a Phase I federal SBIR/STTR grant award. Eligible applicants can apply to receive up to $50,000 in matching grants, with the option to re-apply and receive up to five awards for each federal Phase I award received (one award per fiscal year). Awards are non-competitive and are granted on a first-come-first-served and rolling basis.
US Grants is a one-stop portal to find and apply for government grants, stimulus packages and funding opportunities from local, state and federal government agencies. Available Arizona small business grants include funding initiatives for organizations that operate in the fields of tech, health, research, sciences, agriculture, the environment, etc.
MORE: Grants for farmers.
The Illinois Restaurant Association Educational Foundation provides this grant to restaurants and their staff. The program is designed to support employees who cannot afford unpaid leave. Restaurant workers may apply for grants ranging from $250 to $1,500 to help with living expenses after suffering injuries, illnesses, or the loss of a close relative that prevents them from working and when their employer is unable to offer paid time off or other benefits.
Illinois Grantwatch also operates a directory of current grant opportunities, although not all may be specific to Illinois-based organizations. Up to 2,000 grants may be available at any one time, with award values and qualifying criteria varying by category and mission goal.
Some small business grants in Illinois are provided solely to support female business owners:
The Advantage Illinois funding program is an element of the wider $354million State Small Business Initiative provided by the Illinois Department of Commerce and Economic Opportunity. The program offers low-interest business loans and loan guarantees for Illinois businesses that are majority owned by women, veterans, or disabled or minority entrepreneurs. Advantage Illinois works in partnership with local lenders. Note that this program does not offer grants. Funding comes in the shape of business loans that must be repaid plus interest.
MORE: Grants for disabled, veteran or minority business owners.
The WomensNet Amber Grants awards multiple grants per year to women wishing to start or grow their own business. $10,000 is offered monthly in three separate categories (total of $30,000 per month available). Participants who win a monthly prize also automatically qualify for the draw for an annual $25,000 award – with three prizes available, one for each award category.
You can apply for any of these grants by completing an online application and paying a $15 entrance fee.
MORE: Grants for women.
The Women’s Business Development Center assists female business owners in obtaining funds, either as loans, government grants, or other types of financial assistance. They also provide networking opportunities, business consulting, and certifications for minority or women-owned businesses. The WBDC have offices in Aurora and Chicago. Over their 37 years history they have helped more than 111,000 women gain self-sufficiency and to launch or expand their business.
MORE: Grants for black women.
Business loans may provide an alternative source of funding for your business or new venture. Also look at Small business loans in Illinois.
Online lenders will typically be the best option for this type of financing, but you may pay higher interest rates and fees than you would with traditional banks. Credit checks are standard with most commercial financing, but depending on the type of loan you choose, you may not need to provide collateral:
You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required. Learn more about the Small business loans in Illinois.
A business line of credit is a business loan that functions like a high-value credit card. Borrowers can withdraw as much as they want when they want from a loan facility up to the limit of their borrowing. You only pay interest on the sums you withdraw, not the whole credit line. This can significantly reduce your borrowing costs. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral required.
Equipment loans use the asset you’re financing as security – no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
Merchant cash advances are designed for businesses that accept customer payments by credit and debit card. You borrow against the value of your card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales on a daily, weekly or monthly basis. Your sales act as security for the loan, no added collateral is required.
Revenue-based financing functions like a merchant cash advance but with higher borrowing limits. Based on the size and regularity of their total revenues, (not just their credit card sales), businesses may receive a lump sum and pay it back over a short-term schedule, typically by small deductions from their daily sales. This type of loan can usually be secured quickly as qualification rules are less intensive and credit scores are not so critical. No added collateral is required.
Nonprofit and community-based lenders can provide SBA Microloans to business owners who may struggle to secure standard business financing. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Small business grants are like trains and buses, they come and go all the time. To find the best grant for your organization you’ll need to keep checking state government sites and stay on top of new initiatives from the funders listed above as well as other sources.
Technically, grants are free money, you never have to pay back the cash. However, it’s free money with restrictions. Most small business grants come with strict rules on use and a specific goal you are expected to obtain – such as hiring a certain number of new employees. Many grant funders will want a results report somewhere down the line. If you use the money for other purposes than those it was given for, you may have to pay the grant back. The conclusion: Use the money wisely and stay within the rules of the gift.
See above. If you choose to use the grant money in ways that are outside the rules of the award, or you cannot prove you spent the funds where you were supposed to, you may have to give the cash back. Going out of business may have no impact on the grant award if it’s a legitimate business failure. However, if your business liquidator finds you liable for misuse of the grant, or you deliberately took the cash and then bankrupted your business, you may be liable to repay the award.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and compare top quality small business grants and business loans from a choice of providers. Give your business the chance it deserves. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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