Funding for Entrepreneurs

Access to capital is vital to the start, growth and sustainability of small business. The good news is there are many options available for Kentucky’s small businesses.

Financing typically falls into two categories – debt or equity. Debt financing can range from conventional sources like banks, credit unions, micro-lenders and government backed guarantees to unconventional lending platforms, such as peer-to-peer lending and crowd-funding.

Equity options range from founder’s capital, family and friends, to private equity placement such as angel investors and venture capital. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are examples of government sponsored equity that take the form of a grant.

Kentucky offers a variety of programs to encourage new venture formation, business expansion and job creation. Supporting entrepreneurs helps the Commonwealth achieve long-term economic growth and employment for its citizens.


Financing Programs:

  • Kentucky Small Business Credit Initiative (KSBCI)
    The KSBCI helps increase the availability of credit by reducing the risks participating lenders assume when making loans to small businesses. Using three types of credit enhancement programs, KSBCI helps lenders finance creditworthy small businesses that would typically fall just outside of their normal lending guidelines.
  • Small Business Loan Program
    The Small Business Loan program helps entrepreneurs acquire the funding needed to start or grow their company if engaged in manufacturing, agribusiness, or a service- or technology-based business. Loan funds may be used to acquire land and buildings, purchase and install equipment, or for working capital. The minimum loan is $15,000 and the maximum is $100,000. Approved companies must create one new full-time job within one year of the loan closing. The term of the loan can range from 3-10 years.


Tax Credit Program:

  • The Kentucky Small Business Tax Credit (KSBTC)
    The KSBTC program provides nonrefundable tax credits to eligible businesses hiring one or more eligible individuals and investing at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit businesses having 50 or fewer full-time employees are eligible for the program.


Innovation Options:

  • Commonwealth Seed Capital Fund
    The Commonwealth Seed Capital Fund (CSC) is an independent, nonprofit fund that invests in early-stage Kentucky businesses to facilitate the commercialization of innovative ideas and technologies. CSC invests in companies that have a significant Kentucky presence, the prospect for substantial growth, and the potential to generate an appropriate rate of return. Call 859-685-3397 or email
  • Kentucky Enterprise Fund and Rural Innovation Fund
    The Kentucky Enterprise Fund and the Rural Innovation Fund provide seed-stage capital to Kentucky-based companies that are commercializing a technology-based product or process. The funds exist to encourage private investment in Kentucky-based technology companies with high growth potential.
  • SBIR-STTR Matching Funds Program
    The Cabinet will match, on a competitive basis, Phase 1 and Phase 2 federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards received by Kentucky small businesses – and those willing to relocate to Kentucky. Phase 1 federal awards are matched up to $150,000 to support exploring the technical merit or feasibility of an idea or technology, and federal Phase 2 awards are matched up to $500,000, for up to two years, to support full-scale research and development.
  • Kentucky New Energy Ventures Fund
    The Kentucky New Energy Ventures Fund provides seed-stage capital to support the development and commercialization of alternative fuel and renewable energy products, processes and services in Kentucky. The funds exist to encourage private investment in Kentucky-based technology companies with high growth potential. KNEV makes grants of $30,000 and investments ranging from $250,000 to $750,000. Qualified companies must be Kentucky-based and funds are to be used for business development activities.


To find out if your small business qualifies for assistance, contact the Office of Entrepreneurship. Email us at or call 800-626-2930.

Kentucky Cabinet for Economic Development   Old Capitol Annex  300 West Broadway   Frankfort, KY 40601
502-564-7140 (local)   800-626-2930 (toll free)