Do you need a business license to apply for a small business grant?
Why funders ask for a license
A business license or registration proves your business is legally recognized. Funders use it to verify you're a real operation, not a hobby. It also helps them comply with their own rules, like only funding businesses in certain states. Some grants require a state license, a city permit, or a formal LLC.
- State business license or registration
- City or county business permit
- Employer Identification Number (EIN)
- Articles of incorporation or LLC filing
- Professional licenses (e.g., contractor, food handler)
When you might not need one
Many grants for very small businesses or sole proprietors don't require a license. They may ask for an EIN, which you can get for free from the IRS. Some grants for startups accept a business plan and proof of concept instead. Always read the fine print.
How to get a license if needed
Contact your state's business licensing office or your city clerk. Fees and requirements vary widely—some licenses cost $50, others several hundred. Processing can take days to weeks. If a grant deadline is close, start the process early.
Common mistakes
- Assuming all small business grants require a license; many don't, especially for sole proprietors.
- Waiting until the last minute to get a license, which can cause you to miss the deadline.
- Confusing an EIN with a business license; they are different, and an EIN is often easier to get.
