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Tennessee small business grants, loans and training funds (2026)

Tennessee's $116.9 million share of the federal SSBCI runs as Fund Tennessee: LendTN loans through six CDFIs and InvestTN equity through Launch Tennessee. The state has no general grant for opening a business. Its real grants pay for employee training, export costs and federally funded research, and this guide labels each 2026 program by what it pays.

Written by Editorial team Checked against 8 agencies Last reviewed How we review

Figures apply to 2026

Contents11 sections

Key takeaways

  • Tennessee has no state grant for starting a business; its SSBCI money, branded Fund Tennessee, goes out as CDFI loans and equity investments ⁠2.
  • LendTN loans run from $1,000 to $5 million through six CDFIs, and lenders take applications on a rolling basis ⁠1.
  • The Incumbent Worker Training Program pays up to $25,000 per grant to train existing staff; firms with 50 or fewer employees pay at least 10% of the cost ⁠8.
  • Tennessee STEP reimburses 75% of eligible export costs, up to $7,000 per company, for activities finished by September 29, 2027 ⁠11.
  • LaunchTN's SBIR/STTR Matching Fund adds up to $100,000 (Phase I) or $300,000 (Phase II); its FY27 window closed October 16, 2026 ⁠6.

Quick facts

State startup grantNone. Fund Tennessee offers loans, equity and technical help ⁠2
SSBCI approvalUp to $116.9 million: $46.9 million debt, $70 million venture capital ⁠3
LendTN loan range$1,000 to $5 million, depending on the CDFI ⁠1
Employer training grantUp to $25,000 per IWT grant; $50,000 limit across consecutive years ⁠8
Export grant75% reimbursement, up to $7,000 per company (STEP) ⁠10
Free advisingTSBDC consulting at no cost, offered by county ⁠12

Programs at a glance

Tennessee small business grants programs
ProgramTypeHelp availableStatus
LendTN (Fund Tennessee)Tennessee Department of Economic and Community Development (TNECD), through participating CDFIs Repayable loan (SSBCI loan participation) CDFI loans from $1,000 to $5 million for equipment, working capital, real estate and new businesses Open (rolling, through participating lenders)
InvestTN Regional Seed Fund and Growth FundLaunch Tennessee (LaunchTN) for TNECD Equity investment (repaid only through company ownership) $25,000 to $250,000 (Seed) or $250,000 to $3 million (Growth), with at least a 1:1 private match Open (Multi Fund fully deployed)
SBIR/STTR Matching FundLaunch Tennessee (LaunchTN) Grant (match to a federal SBIR/STTR award) Up to 50% of the federal award: up to $100,000 for Phase I, $300,000 for Phase II Closed (FY27 window was October 5-16, 2026)
Incumbent Worker Training Program (IWT)Tennessee Department of Labor and Workforce Development with Local Workforce Development Areas Grant (training cost reimbursement, employer match) Up to $25,000 per grant to train existing full-time employees; employer pays 10% to 50% Through local workforce areas (competitive rounds)
FastTrack Job Training Assistance ProgramTennessee Department of Economic and Community Development (TNECD) Grant (discretionary, tied to net new jobs) Training money for net new full-time jobs at new or expanding companies Open (discretionary, contract required before hiring)
Tennessee State Trade Expansion Program (STEP)Tennessee Export Initiative at Belmont University, with the U.S. Small Business Administration Grant (cost reimbursement) 75% of eligible export costs, up to $7,000 per company Open (rolling; activities must end by September 29, 2027)
Inner City Economic Development (ICED) LoansEconomic Development Growth Engine for Memphis & Shelby County (EDGE) Forgivable loan Up to $25,000 for façade, streetscape and some interior work in eligible Memphis census tracts Open (approved by EDGE committee)
Tennessee Small Business Development Center (TSBDC)TSBDC network with the U.S. Small Business Administration Free service No-cost consulting on business plans, financing, loan packaging, exporting and more Open

In October 2026, Tennessee’s main small business financing comes from Fund Tennessee, the state’s share of the federal State Small Business Credit Initiative (SSBCI), overseen by the Tennessee Department of Economic and Community Development (TNECD). Fund Tennessee has three parts: LendTN (loans), InvestTN (equity) and AssistTN (technical help through the Tennessee Small Business Development Center) ⁠2. None of them is a grant. The U.S. Small Business Administration says the same at the federal level: it does not give grants for starting or expanding a business ⁠15. Tennessee’s real grants are narrower. They pay for employee training, export marketing, and research that a federal agency has already funded.

What Tennessee funds, and what it does not

Most lists of “Tennessee small business grants” mix four different kinds of money. Sort them before you apply:

  • Repayable loans and equity. LendTN loans from community development financial institutions (CDFIs), and InvestTN investments in exchange for company shares ⁠1⁠5.
  • Training grants. The Incumbent Worker Training Program (IWT) for existing staff and TNECD’s FastTrack Job Training Assistance Program for new hires at expanding companies ⁠8⁠9.
  • Reimbursement grants with conditions. Tennessee STEP for exporters and the SBIR/STTR Matching Fund for companies that already won a federal research award ⁠6⁠10.
  • Tax credits for larger projects. TNECD’s Job Tax Credit is $4,500 per position. It requires at least 25 net new full-time jobs within 36 months and at least $500,000 of investment ⁠9. It reduces franchise and excise tax and pays no cash up front.

LendTN: Fund Tennessee’s $47 million loan program

Treasury approved up to $116.9 million for Tennessee in February 2023. TNECD set aside $46.9 million for a debt program and $70 million for venture capital ⁠3. Treasury’s August 2026 program list shows four Tennessee SSBCI programs. LendTN is the loan participation program, run by TNECD itself. Launch Tennessee runs three equity programs: the InvestTN Technology Fund, the InvestTN Regional Seed Fund and the InvestTN Multi-Fund ⁠4. Fund Tennessee says 52% of its funds are aimed at socially and economically disadvantaged individuals, and the program is meant to run 8 to 10 years ⁠2.

You do not apply to the state for LendTN. You apply to one of the participating CDFIs, which makes the loan and sets the rate and terms ⁠1.

LendTN participating lenders (Fund Tennessee, checked October 2026)
Lender Loan range Area served
BetterFi $1,000 to $25,000 South Cumberland Plateau (Grundy County), Hamilton County
Communities Unlimited $1,000 to $200,000 Statewide, West Tennessee focus
River City Capital Up to $250,000 Shelby County, Memphis
Tennessee Rural Development Fund $50,000 to $5 million Middle Tennessee, Upper Cumberland, East Tennessee
Pathway Lending Up to $5 million Statewide
Three Roots Capital Up to $5 million Statewide, East Tennessee focus

No more than $5 million of SSBCI money can go into one loan, and the total project cannot exceed $20 million ⁠1.

LendTN money can pay for equipment, working capital and real estate, and it can fund new businesses. Speculative ventures, lending businesses, gaming and cannabis are excluded. The business must be registered in Tennessee with most of its senior management living in the state, and it must stay in Tennessee for at least 24 months after funding. Fund Tennessee states there is no fixed deadline ⁠1.

InvestTN equity is for venture-scale startups

InvestTN buys shares in Tennessee startups; it does not make grants. Every Fund Tennessee dollar must be matched by at least $1 of private capital ⁠2. The Regional Seed Fund ($28 million) invests $25,000 to $250,000. To apply, you work through a designated regional entrepreneur center, and the business model must suit venture investors. The Growth Fund ($36 million) invests $250,000 to $3 million at seed, Series A and Series B. The $6 million Multi Fund, which backs venture funds, is fully deployed and closed to new applications ⁠5. InvestTN can give a conditional commitment that helps you recruit the matching investors ⁠5. A restaurant, contractor or retail shop is not the target. LendTN or an SBA-guaranteed bank loan fits those businesses better.

LaunchTN’s SBIR/STTR Matching Fund and proposal microgrants

This is one of the few true cash grants Tennessee offers, and it only goes to companies that have already won a federal Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) award. LaunchTN matches up to 50% of the federal award: up to $100,000 for Phase I and $300,000 for Phase II, paid in two tranches ⁠6. For FY27, the federal notice of award had to fall between July 1, 2025 and September 30, 2026. Applicants must be pre-IPO with fewer than 500 employees. They must agree to keep their headquarters in Tennessee for 24 months and report twice a year ⁠6. First-time applicants get priority, as do life sciences, advanced energy, agriculture and mobility firms and companies in counties with little SBIR funding. The FY27 window ran October 5 to 16, 2026, and is closed ⁠6.

If you have not yet won a federal award, LaunchTN offers microgrants of up to $2,500 to hire an SBIR/STTR proposal consultant. It also runs a monthly workshop that explains the programs ⁠7.

Training grants: IWT for current staff, FastTrack for new hires

Incumbent Worker Training (IWT) is a federally funded (WIOA) grant run jointly by the Department of Labor and Workforce Development and the state’s Local Workforce Development Areas (LWDAs) ⁠8. To qualify, a business must:

  • be a Tennessee for-profit business (or a nonprofit in health care);
  • have operated for at least one year;
  • employ at least five full-time workers;
  • be current on federal and state taxes ⁠8.

Training must either upgrade employees’ skills or improve business processes, such as Lean, ISO certification or Six Sigma. Conference costs are not allowed ⁠8.

Each grant can be up to $25,000. A company can receive $50,000 in total across consecutive program years, and after reaching that limit it must sit out a year ⁠8. You share the cost based on your headcount:

IWT employer share by company size (TDLWD FAQ, updated February 2026)
Employees Minimum employer share of training cost
50 or fewer 10%
51 to 100 25%
More than 100 50%

Your LWDA scores the application and sends it to the state’s Workforce Services Division with a recommendation. The number of awards in each round depends on funding. Training must end by December 31 of the program year, contracts cannot be extended, and a final report is due within 45 days of the last training session ⁠8.

FastTrack Job Training Assistance pays new or expanding companies to train net new full-time employees. A net new job averages at least 37.5 hours a week, lasts 12 months and comes with health coverage ⁠9. Awards are discretionary. Eligibility depends on job count, wages, investment and location, and positions filled before the contract is signed are not reimbursed without prior approval ⁠9. Contact TNECD before you hire.

Export costs: Tennessee STEP at Belmont University

Tennessee’s STEP grant is administered by the Tennessee Export Initiative (TEI) at Belmont University with SBA funding ⁠10. It reimburses 75% of eligible costs, with a $7,000 maximum per company. The caps per activity are:

  • $4,000 for U.S. Commercial Service services such as Gold Key matchmaking;
  • $5,000 for international website work;
  • $5,000 for marketing media designed for foreign buyers;
  • $7,000 for exhibiting at an international trade show ⁠10⁠11.

You must have been in business at least one year, be registered and operating in Tennessee, meet SBA size standards and have a written export plan. Products or services must be of U.S. origin or have at least 51% U.S. content ⁠10. Under the July 2026 guidelines, approved activities must be completed by September 29, 2027. You submit a reimbursement request within 30 days of finishing each activity ⁠11.

Memphis ICED loans and farm cost share

ICED loans (Memphis and Shelby County). EDGE makes forgivable loans of up to $25,000, mainly for building façades and streetscapes. Interior work and expansions may also qualify ⁠13. The building must be in a New Markets Tax Credit eligible census tract, and city and county property taxes must be current. You must fund one-third of approved construction costs. Owners and tenants with a three-year lease can apply. Liquor and tobacco stores, pawnshops, payday lenders, mini-storage and auto dealers are excluded ⁠13. Call EDGE at 901-341-2100.

Tennessee Agricultural Enhancement Program (TAEP). For farmers, the Tennessee Department of Agriculture’s TAEP pays cost share on equipment and structures after an educational requirement is met. The 2026-27 application window ran October 1 to 7, 2026 (closed), and approval letters are scheduled for mid-December ⁠14.

Getting started in Tennessee: TSBDC first, then the right program

The TSBDC provides consulting at no cost on starting a business, financial planning and finding funding, loan packaging, exporting and government contracting ⁠12. Select your county on its consulting page to reach the nearest center.

  1. Book a free TSBDC consultation

    Bring a business plan or idea summary, recent financial statements or projections, and the amount you need. Ask the consultant which LendTN lender or training grant fits your business ⁠12.

  2. Match yourself to a LendTN lender

    Use the table above: a $15,000 loan in Hamilton County might go to BetterFi, while a $2 million real estate loan in Knoxville fits Tennessee Rural Development Fund, Pathway Lending or Three Roots Capital. Apply directly with the lender ⁠1.

  3. Ask your Local Workforce Development Area about IWT before training starts

    Confirm the round schedule, and have your employee count, trainee list, training provider quotes and your cost share ready. Expect to supply trainee details, including Social Security numbers, before reimbursement ⁠8.

  4. If you are hiring for an expansion, contact TNECD before filling positions

    FastTrack training money depends on a signed contract ⁠9.

  5. Exporters: start the STEP readiness questionnaire now

    TEI will invite you to an online interview, then you apply before the activity takes place. Questions go to [email protected] ⁠11.

  6. Research-based startups: get the SBIR award first

    Use LaunchTN’s microgrant and workshop to prepare a proposal, then watch for the FY28 Matching Fund window ⁠6⁠7.

  7. If a lender says no, ask why and try another

    Each CDFI makes its own credit decision, so a decline from one LendTN lender does not bar you from another lender serving your county ⁠1.

For other Tennessee assistance, see the Tennessee overview, or compare states on the small business grants hub.

Verified resources

Where to apply

Sources

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