Illinois small business grants and loans for 2025

What to consider before applying

If you’re beginning to explore business funding and support in Illinois, here’s what to consider before you apply.

How hard is it to get a business loan in Illinois?

Getting a business loan in Illinois depends on credit history, revenue, and collateral. Traditional bank loans can be tough for new businesses, but microloans, loans through SBA-approved lenders, online lenders, and state-backed programs may offer more flexible options and faster approvals.

What qualifies as a small business in Illinois?

In Illinois, a small business is typically defined by employee count, revenue, and industry. For state and federal funding programs, such as grants and loans, businesses with fewer than 500 employees often qualify, though some programs set lower limits based on specific eligibility requirements.

Do I need to be based in Illinois to qualify for state business grants and loans?

Yes, most Illinois state-funded programs require businesses to be headquartered or primarily operating within the state, though some grants may allow out-of-state businesses if they create jobs or invest in Illinois communities.

7 Illinois small business grants

Grants provide entrepreneurs funding to launch, grow, and sustain their businesses. In some cases, small business grants can help keep operations running during economic uncertainty. Unlike loans, grants don’t require repayment, making them a valuable financial resource. Here are some Illinois-sponsored grants available to small businesses:

1. Illinois Federal Grant Support Program

The Illinois Federal Grant Support Program invests nationally sourced funds in the state based on formulas derived from demographic data that includes geography, poverty levels, population, and Medicaid status. Federal grants usually require matching funds ranging from 20% to 50%, although it isn't always required.

2. Chicago Small Business Improvement Fund Grants

Chicago Small Business Improvement Fund Grants provide resources for repairs and improvements to permanent buildings throughout the Windy City. Grants range from 30% to 90% of all remodeling costs, up to $150,000 or $250,000, respectively, for commercial and industrial properties.

3. Illinois State Trade and Export Promotion Grants

Illinois State Trade and Export Promotion (ISTEP) grants help businesses involved in interstate trade pay for business-related travel. Financial assistance covers some travel costs for a pair of company representatives to trade shows and matchmaking events, including airfare and hotel accommodations.

4. Apprenticeship Expansion Competitive Grant Program 

Funded by the U.S. Department of Labor and the Workforce Innovation and Opportunity Act, this program aims to establish, scale, and sustain apprenticeship opportunities. Eligible applicants include apprenticeship intermediaries with a strong track record in workforce development. Awards will be used to increase access to apprenticeship programs and strengthen the state's workforce pipeline.

5. Internship & Workforce Upskilling Program for Small and Mid-sized Manufacturers 

Designed for small and medium-sized manufacturers in Illinois, the Internship & Workforce Upskilling program helps businesses invest in training and internship opportunities to develop a skilled workforce. Funding is allocated to programs that enhance job readiness and support long-term employment in the industry.

6. Small Business Capital and Infrastructure Grant Program 

The Small Business Capital and Infrastructure Grant program provides funding for capital improvement projects that drive business growth, improve operational efficiency, and promote job creation and retention. Eligible businesses can use awards to strengthen operations and contribute to Illinois' economy through sustainable development and infrastructure enhancements.

7. Illinois Digital Equity Capacity Grant Program (IDEC) 

The IDEC awards grants to organizations that address systemic barriers to digital access, with a focus on improving outcomes in health, education, and economic stability. Funding supports initiatives that increase digital literacy, expand internet accessibility, and enhance workforce participation.

Eligibility requirements for grants in Illinois

Eligibility requirements for small business grants in Illinois vary by program, but they generally consider factors such as the following:

• Business size: Many grants are aimed at small businesses, often defined by the number of employees or annual revenue. 
• Location: Some grants target businesses in specific regions or communities within Illinois, particularly those in underserved or economically distressed areas. 
• Financial need: Applicants may need to demonstrate financial need or a negative impact from events. 
• Industry focus: Certain grants are available for businesses in specific industries, such as technology, manufacturing, or sustainability.
• Operational history: Some programs require businesses to be established for a certain period before applying.
• Commitment to initiatives: Grants may prioritize businesses that support job creation, environmental sustainability, or innovation.
• Matching funds: Some grants require businesses to contribute a portion of the funding themselves.
• Ownership status: Depending on the initiative, minority-owned, women-owned, and veteran-owned businesses may receive priority consideration.
• Required documentation: Applicants may need to submit a business plan, financial statements, or proof of compliance with state regulations.

4 federal small business grants

Federal grants, such as the following, are also available and may be a potential funding source for your business.

1. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs

The SBIR and STTR programs support small businesses engaged in research and technological innovation. These grants provide funding to help businesses develop and commercialize new technologies in industries such as healthcare, defense, and energy. Eligible businesses must meet federal guidelines and work with government agencies like the National Science Foundation or the Department of Defense.

2. USDA Rural Business Development Grants

The U.S. Department of Agriculture (USDA) provides Rural Business Development Grants (RBDG) to help small businesses in rural communities grow and thrive. These funds support projects such as training, technical assistance, and infrastructure improvements. To qualify, businesses must operate in areas with a population of fewer than 50,000 people.

3. Minority Business Development Agency (MBDA) Grants

The MBDA, a division of the U.S. Department of Commerce, offers grants to support minority-owned businesses. These grants fund programs providing business training, access to capital, and expansion opportunities. MBDA grants are typically awarded to nonprofit organizations and business development centers that assist minority entrepreneurs.

4. Economic Injury Disaster Loans and Grants

During economic downturns and natural disasters, federal grants and low-interest loans become available through agencies like the SBA and the Federal Emergency Management Agency (FEMA). 

Additional grant resources for Illinois businesses

Illinois business owners can find grants beyond DCEO and federal programs through local governments, private foundations, and corporate initiatives. These alternative funding sources may include:

• Local government grants – Cities and counties often offer funding for business development, infrastructure, or revitalization projects.
• Private foundation grants – Many nonprofits support businesses that align with their mission, such as sustainability or economic equity.
• Corporate grants – Companies may provide funding to entrepreneurs, especially in underserved communities or growing industries.

How to get a business grant in Illinois: Application process

Applying for grants—whether federal, state-sponsored, private foundation, corporate, or local—requires careful preparation, attention to detail, and meeting specific requirements. Below is a step-by-step guide to help you navigate the process and increase your chances of securing funding.

Applying for Illinois-sponsored grants 

Follow these steps to apply for grants listed on the Illinois Department of Commerce and Economic Opportunity website. 

1. Explore Illinois grant opportunities

Check the Illinois Department of Commerce and Economic Opportunity (DCEO) website for current grant offerings.

2. Register with GATA

Comply with the Grant Accountability and Transparency Act (GATA) by registering in the GATA Grantee Portal. Ensure your business is in “Good Standing” with the State of Illinois.

3. Complete pre-qualification requirements

Submit required financial statements, proof of insurance, and other necessary documents.

4. Review the Notice of Funding Opportunity (NOFO)

NOFO is an official announcement from a government agency or funding organization that provides details about available grant funding. Read the NOFO carefully to understand eligibility criteria and required application materials.

5. Prepare and submit your application

Use the online platform designated by the funding organization to submit your grant application. Include all required information and supporting documents, and follow formatting guidelines.

6. Attend grant trainings

Participate in any applicable training sessions offered by state agencies to enhance your application and improve compliance with grant requirements.

Applying for federal grants

1. Identify federal funding opportunities

Search for available grants on Grants.gov and specific federal agency websites. Review eligibility criteria, funding priorities, and application deadlines.

2. Obtain a Unique Entity Identifier (UEI)

Register in the System for Award Management (SAM.gov) to obtain a UEI, which is required for federal grants. Maintain an active SAM.gov registration to stay eligible.

3. Review the Funding Opportunity Announcement (FOA)

Carefully read the FOA to understand grant objectives, requirements, and evaluation criteria. Note key deadlines and required documents.

4. Prepare the application package

Write a detailed project narrative explaining your goals, impact, and execution plan. Develop a comprehensive budget and justification for requested funding. Be sure to also gather supporting documents, such as letters of support, resumes, and compliance certifications

5. Submit your application

Use the designated platform to submit your application. For federal grants, this is typically Grants.gov. Ensure all components are properly formatted and submitted before the deadline.

6. Follow up and await feedback

Monitor your application status through the submission portal. Respond promptly to any requests for additional information or clarifications.

Applying for local, private, or corporate grants

1. Find grant opportunities

Check local government websites, private foundations, and corporate grant programs for available funding. Review eligibility and application requirements.

2. Prepare required documents

Gather business details, financial statements, and a strong proposal outlining your project, goals, and impact.

3. Submit your application

Follow the specific submission process for each grant, ensuring all required documents are included.

4. Monitor and follow up

Track your application status and respond to any follow-up requests for additional information.

Are there repayment requirements for small business grants in Illinois?

Grants aren't usually designed for repayment, but you have to use them as they're intended. You'll need to sign a legal funding agreement, and violating its terms and conditions might make you liable for repayment. Properly accounting for how you use the funds is crucial.

4 Illinois small business loans

Illinois offers a variety of loan programs to support small businesses, providing essential capital for startup costs, expansion, and operational needs. Below are some notable state-sponsored loan programs:

1. Advantage Illinois Participation Loan Program (PLP)

The Advantage Illinois Participation Loan Program partners with local lenders to provide low-interest loans to small businesses. It assists with financing for startup costs, working capital, equipment, and inventory. Eligible businesses must operate in Illinois, have fewer than 750 employees, and be in good standing with the Secretary of State. 

2. Cannabis Loan Program

Designed to support Social Equity Applicants in the cannabis industry, the Cannabis Loan Program offers low-interest loans to assist with expenses related to opening dispensaries, craft grow operations, or transportation businesses. Eligibility is limited to applicants who meet social equity criteria as defined by the state. 

3. Climate Bank Finance Participation Loan Program

Administered by the Illinois Finance Authority, this program focuses on providing financing for environmentally supportive, "green" businesses, including those addressing climate change impacts. Eligible businesses must be involved in ventures that support environmental sustainability.

4. SBA 7(a) Loan Program

In addition to state-sponsored loan programs, the SBA 7(a) Loan Program is a federally backed option that offers Illinois small businesses funding for working capital, equipment, real estate, and debt refinancing. Loans are issued through banks, credit unions, and alternative lenders, with the U.S. Small Business Administration guaranteeing a portion of the loan to reduce lender risk. Eligibility typically requires strong credit, sufficient revenue, and a solid business plan.

Illinois small business loan eligibility

To qualify for Illinois small business loan programs, a business generally must meet the following criteria:

• Size standard: Have fewer than 750 employees, though some programs set the limit at 500 or fewer.
• Location: Operate within the state of Illinois.
• Good standing: Be in compliance with state regulations and free of recent bankruptcies, judgments, or liens.

A business must also meet any other requirements specified by the lender. 

Do you have to pay back loans in Illinois as a small business?

Yes, small businesses in Illinois must repay their loans, typically with interest. Unlike most grants, which don’t require repayment, loans provide larger amounts of capital but come with financial obligations. Repayment terms vary by lender and loan type, so it’s important to consider factors like interest rates, loan duration, fees, and penalties for early or late payments. Consulting a financial advisor or accountant can help you choose the best loan for your business and manage repayment effectively.

How to get a business loan in Illinois: Application process

Small business loans in Illinois are available from both private lenders and government-backed programs. To improve your chances of approval, follow these key steps:

1. Assess your financing needs 

Determine how much funding you need, what it will be used for, and which loan type best suits your business.

2. Check your credit and financials

Review your business and personal credit scores, gather financial statements, and ensure your revenue supports loan repayment.

3. Prepare a business plan 

Most lenders require a detailed business plan outlining your operations, revenue projections, and repayment strategy.

4. Research lenders 

Compare options from banks, credit unions, online lenders, and state-backed programs to find the best terms and eligibility requirements.

5. Gather required documents

This typically includes tax returns, financial statements, legal business documents, and collateral details if needed.

6. Submit your application

Follow the lender’s specific process, whether online or in person, and ensure all required documents are included.

7. Await approval and funding 

Lenders review your application, conduct underwriting, and may request additional details before issuing funds.

Illinois small business funding resources and support

Finding the right funding and support is essential for both new and growing businesses in Illinois. Whether you need capital, mentorship, or business development resources, several programs are available to help entrepreneurs succeed. Here are some options:

The Office of Minority Economic Empowerment

The Office of Minority Economic Empowerment supports women, minorities, veterans, and disabled entrepreneurs with resources to overcome systemic barriers. By helping these businesses thrive, the program strengthens underserved communities and boosts the state’s economy.

Illinois Angel Investment Credit Program

The Illinois Angel Investment Credit Program identifies specific businesses as qualified new business ventures. Investors who invest in these companies can get 25% to 35% state tax credits for the first $2 million they put into them. Angel Investment tax credits in Illinois are capped at $15 million annually and released quarterly to the first investors who apply.

Illinois Small Business Development Centers

Illinois Small Business Development Centers are a network of offices across the state. Consult your local office for information, training, and confidential guidance. Resources and services include business plan development, marketing assistance, and financial analysis.

Other ways to fund your small business in Illinois

Grants and loans are common funding options for businesses, but they aren’t the only ways to secure financial support. Illinois small businesses can explore a variety of alternative funding methods to fuel growth and operations. Here’s a look at some of the most popular options:

Alternative loans

Non-traditional financing options such as online lenders, peer-to-peer lending, or merchant cash advances, often with more flexible requirements than bank loans.

Angel investors

Established entrepreneurs (angel investors) who invest their personal money into startups, often at an early stage, in exchange for equity.

Bootstrapping 

Using personal savings and revenues to fund business operations without external financing.

Contests

Competitions where businesses pitch ideas to win funding or resources.

Corporate programs

Initiatives by large companies offering funding, mentorship, or resources to small businesses.

Crowdfunding 

Raising small amounts of money from a large number of people, typically via online platforms.

Friends and family 

Obtaining funds from personal networks to support business ventures.

Incubators 

Organizations that support startups with resources, mentorship, and sometimes funding.

Microloans

Small, short-term loans from nonprofit lenders, government programs, or alternative lenders, often designed for startups and businesses that may not qualify for traditional bank loans.

Product presales

Selling products before they are produced to generate upfront capital.

Purchase order financing

Obtaining funding based on purchase orders to pay suppliers and fulfill customer orders.

Vendor financing

Suppliers provide goods or services with deferred payment terms to support business cash flow.

Venture capitalists 

Professional firms that invest in startups with high growth potential in exchange for equity.

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