Table of Contents
- Grants for Small Businesses in Arizona
- Do You Have to Pay Back a Small Business Grant?
- Who Is Eligible for Small Business Grants in Arizona?
- What Industries Does Arizona Support With Grants?
- Arizona Resources for SMB Owners Looking for Funding
- Alternative Funding Sources for Small Businesses in Arizona
- FAQ
Arizona has more than 650,000 small businesses which together employ 1.1 million workers — more than 40% of the state’s private workforce. To help entrepreneurs thrive in the Grand Canyon State, Arizona offers a number of small business grants for new and existing small businesses.
Unlike a small business loan, a small business grant typically doesn’t have to be repaid, making it more or less equivalent to free money. While competition for Arizona grants can be stiff, here are four small business grants in Arizona you may want to check out.
Key Points
• Arizona small business owners can access a wide range of grant programs — from state-level innovation funding to city-specific grants.
• The Arizona Commerce Authority (ACA) offers qualifying startups grants of $50,000 or more, along with three months of mentorship from an Entrepreneur-in-Residence to support early-stage growth.
• STEP grants, offered through the ACA and the SBA, help Arizona businesses expand internationally by funding the export of goods and services to foreign markets.
• Mesa-based businesses can receive up to 50% reimbursement for eligible expenses tied to trade show participation and export training seminars through a local grant program.
• When grants aren’t available, Arizona small business owners can explore SBA loans, business lines of credit, and equipment financing as practical alternatives to fund growth and operations.
Grants for Small Businesses in Arizona
If you’re looking for a small business grant to grow or start your business in Arizona, here are some options to explore.
Arizona Innovation Challenge
• Program description: One of the largest business plan competitions in the country, this program can help you scale your early-stage venture with feedback and funding.
• Incentive: Eligible companies can receive grants of $50,000 or more, plus three months of support from an Arizona Commerce Authority (ACA) Entrepreneur-in-Residence.
• General requirements:
◦ Be an Arizona small business/startup in one of the following industries
■ Advanced materials
■ Advanced manufacturing
■ Aerospace/Defense
■ Biosciences/Life sciences
■ Clean tech/Renewable energy
■ Information technology – Hardware
■ Information technology – Software
• How to apply: When an application window is open, you can apply through the ACA website.
Arizona State Trade Expansion Program (AZSTEP)
• Program description: The Arizona Commerce Authority, in partnership with the U.S. Small Business Administration (SBA), offers STEP grants that can help you export your goods and services from the Grand Canyon State to foreign markets.
• Incentive: Receive AZSTEP assistance to participate in international trade shows and expos. AZSTEP can help you export your goods and services to Mexico and beyond.
• General requirements: Arizona small businesses seeking to enter export markets for the first time or expand into new markets may be eligible for AZSTEP assistance.
• How to apply: Contact the Arizona Commerce Authority if you’re interested in participating in AZSTEP.
City of Mesa Business Export Assistance Program (BEAP)
• Program description: This program provides eligible small and medium-sized businesses in Mesa with information, training, and marketing support to help them export products/services to international markets, as well as expand operations locally.
• Incentive: Qualified Mesa companies can receive up to 50% reimbursement for eligible expenses associated with trade show participation and export training seminars.
• General requirements:
◦ Be a company headquartered in Mesa, Arizona
◦ Have a current Mesa General Business License (unless exempted)
◦ Not exceed $25 million in annual sales
◦ Complete parts 1 and 2 of the application and related affidavit of eligibility within the time specified.
• How to apply: Contact the City of Mesa’s Office of Economic Development if you wish to apply.
Recommended: Grants for Colorado Small Businesses
Phoenix Artists to Work Program
• Program description: The Phoenix Artists to Work Program supports the arts by awarding grants to artists to support their work on an original, new, or in-process work. In different rounds, the grant may focus on different artistic disciplines.
• Incentive: Receive an award up to $8,000 (in two installments) supporting an art project in one of the disciplines specified for the cycle for which you apply.
• General requirements:
◦ Be a resident of the City of Phoenix
◦ Be a U.S. citizen or permanent resident
◦ Be 18 years or older
◦ Be a practicing artist producing new, original, or in-process work in your chosen field
• How to apply: You can submit your Phoenix Flash Grants application through the city’s online portal.
Do You Have to Pay Back a Small Business Grant?
Typically, no. However, small business grants usually come with terms and conditions, and you may be responsible for paying back the grant if you violate those terms. You typically have to sign a funding agreement to accept a small business grant. Using the grant for an illegitimate purpose may violate the agreement and require business owners to pay back the grant.
In addition, small business grants may require you to spend the money by a certain date. You may also have to provide proof of payment and a written statement detailing how you’ve spent the grant.
Who Is Eligible for Small Business Grants in Arizona?
Local business owners or operators of an enterprise with fewer than 500 employees may be eligible for small business grants in Arizona.
The U.S. Small Business Administration’s Office of Advocacy generally defines a small business as an independent business having fewer than 500 employees. That means that self-employed individuals or small businesses wfith just a few employees can be eligible for small business grants.
What Industries Does Arizona Support With Grants?
Arizona offers grants supporting a wide variety of industries, including:
• Advanced manufacturing
• Aerospace
• Information technology
• Medical technology
• Performing arts
• Renewable energy
• Restaurants
• Retail
• Semiconductor
Arizona Resources for SMB Owners Looking for Funding
Here’s a look at some resources for small and medium-sized businesses in search of funding in the Grand Canyon State.
Arizona Small Business Development Center (SBDC)
The Arizona SBDC is a statewide program that can provide Arizona’s small business owners with the following services at no cost:
• Confidential business counseling
• Market research
• Workshops and training courses
SBA District Office in Arizona
The U.S. Small Business Administration (SBA) is a federal agency that provides resources and support to small business owners. The SBA’s Arizona District Office serves the entire Grand Canyon State with a main office in Phoenix plus a satellite office in Tucson.
Recommended: Grants for California Small Businesses
Alternative Funding Sources for Small Businesses in Arizona
If you don’t qualify for small business grants in Arizona, you’re not necessarily out of funding options. Here are some other ways you may be able to get the capital you need to launch or grow your business in Arizona.
Arizona Microloan Lenders
Community-based nonprofits may offer microloans of anywhere from $500 to $50,000 to underserved small business owners in Arizona, such as women and minorities. Interest rates tend to be low (or zero in some cases), and the qualification criteria are often less stringent compared with other business loans.
Microloans can provide an infusion of cash to get a startup off the ground or grow an existing business. However, you might need to provide a microlender with a personal guarantee and collateral in order to secure funding.
Recommended: Small Business Loans in Arizona
SBA Loans for Arizona Businesses
The U.S. Small Business Administration offers several loan programs to help small businesses access financing. These loans are partially guaranteed by the SBA, which reduces the risk for lenders and makes it easier for small businesses to qualify. The most popular SBA loan program is the 7(a) loan program, which can be used for a variety of purposes, including working capital, equipment purchases, and refinancing existing debt.
SBA loans typically have longer repayment terms and lower interest rates than conventional loans, making them an attractive option for many small businesses.
Recommended: SBA Loan Calculator
Arizona SMB Term Loans From Private Lenders
Term loans are a common type of small business loan offered by private lenders, such as banks, credit unions, and online lenders. Newer businesses typically have a better chance of approval through online lenders because they typically offer more flexible qualification requirements.
Term loans provide a lump sum of money that the borrower repays over a fixed term, typically with a fixed interest rate. The funds can be used for a variety of purposes, including expansion, equipment purchases, and working capital. Your business’s history, annual revenue, and creditworthiness typically help determine which loan terms you’ll have access to and how much you can borrow.
Recommended: What to Know About Short-Term Business Loans
Business Lines of Credit
A business line of credit is a flexible type of financing that allows small businesses to borrow money up to a predetermined limit. Unlike a traditional term loan, where you receive a lump sum of money upfront, a business line of credit allows you to borrow just the amount you need, when you need it. This can be useful for managing cash flow, covering unexpected expenses, or taking advantage of opportunities for growth. Business lines of credit typically have variable interest rates and can be either secured or unsecured, depending on the lender and the borrower’s creditworthiness.
Recommended: Business Line of Credit Calculator
Equipment Financing
Equipment financing is a type of loan specifically designed to help small businesses purchase equipment needed for their operations. The equipment itself serves as collateral for the loan, making it easier for businesses to qualify. The terms of equipment financing loans can vary depending on the lender and the type of equipment being financed, but they typically have fixed interest rates and repayment terms ranging from three to 10 years.
Recommended: Equipment Financing Calculator
The Takeaway
There are many grants available for small businesses in Arizona, ranging from state and local government options to possibilities from private sources.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
How do you get a small business grant in Arizona?
To find a small business grant in Arizona, you might start by contacting the state’s Economic Development Administration and your local Small Business Development Center. Assuming that you are a qualified small business owner, you will still typically need to submit a grant application to be considered for a small business grant in Arizona.
How hard is it to get a business loan in Arizona?
In Arizona, you typically need to have been in business for at least two years and have strong financials to qualify for a business loan from a bank. Online alternative lenders tend to have more flexible qualification criteria for small business loans but generally charge higher interest rates.
What is the easiest SBA loan to get approved for?
There’s no guarantee you’ll get approved for any SBA loan, but SBA microloans may be one of the easier ones to obtain if you’re a new business owner. Startups may be eligible for SBA microloans of up to $50,000. If you’re looking for a streamlined application process, you may want to look into an SBA Express loan.
Photo credit: iStock/JLco – Julia Amaral
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