What is a planning grant?
According to the Agricultural Marketing Resource Center, planning grants fund early work such as feasibility studies and business or marketing plans. They are meant for producers who have an idea but have not yet shown that it can make money.
AgMRC lists a maximum of $50,000 for planning grants. Check the current notice for the limit that applies to the year you apply.
A planning grant can pay for a study that tells you not to proceed. That is a useful result, since it saves you from a larger investment in an idea that would not work.
What is a working capital grant?
Working capital grants help pay the operating costs of a value-added activity that is already planned. AgMRC lists examples such as processing, packaging, advertising, inventory and salaries. The listed maximum is $200,000.
To apply, you generally need evidence that the venture is viable, including financial projections and a plan for how the product will reach buyers.
Working capital grants require a strong case that the business will be viable. Reviewers look for realistic cost and sales projections rather than the most optimistic version.
- Financial projections for the venture
- A plan for reaching buyers
- Evidence of demand
- Budget for eligible operating costs
How do I tell which one fits?
Ask whether you can answer basic questions with numbers. Do you know your cost to make the product, the price buyers will pay, and the volume you can sell? If not, planning is likely the right step. If you have those answers and need cash to start or expand operations, working capital may fit.
Many producers do both in sequence, starting with planning, then applying for working capital later. Be honest with yourself about stage. A tidy business plan with no customer evidence is still an early-stage idea, and reviewers can tell the difference.
- Planning: feasibility study, business plan, marketing plan
- Working capital: processing, packaging, advertising, inventory, salaries
- Match required for both, according to AgMRC
What about the match?
AgMRC describes a one-to-one match, meaning you contribute an amount equal to the grant in cash or eligible in-kind contributions. A planning grant therefore requires a smaller commitment than a working capital grant, but you still need to document it.
Ask Rural Development what counts as an eligible in-kind contribution and how to record it.
Keep clear records for the match from the first day, because costs paid before the grant period may not count.
What does each application need?
Both need a clear narrative, a budget and evidence of eligibility. Working capital applications typically require more financial documentation and a feasibility study or business plan. Planning applications must explain the work to be done, who will do it and what you will deliver at the end.
Read the current notice for required attachments and the scoring criteria.
If you hire a consultant for either type of grant, ask whether those costs are eligible and how they must be documented.
- Narrative describing the work
- Budget and match documentation
- Deliverables at the end of the project
- Resumes or experience of key people
What mistakes should I avoid?
Applying for working capital when the idea is still unproven, or applying for planning when the plan already exists, can lower your chances. Another mistake is hiring a consultant before checking what the grant allows for contract costs.
Also avoid assuming that a planning grant leads automatically to a working capital award. Each is competitive. Ask Rural Development whether previous planning award winners can reapply for working capital and what reviewers tend to look for in that second step.
What happens after the award?
After an award, you sign an agreement that lays out the scope, budget, schedule and reporting. Payments are generally reimbursements for eligible costs that you document, so you front the money and submit proof. That is another reason the match and your cash flow matter.
Keep a separate record for grant-funded work, including invoices, time records and proof of match. Rural Development will expect progress reports and a final report, and records that are tidy from the start make those reports far easier to produce.
Key takeaways
- Planning grants fund feasibility and business planning; working capital grants fund operating costs.
- AgMRC lists maximums of $50,000 and $200,000, with a one-to-one match; confirm current figures.
- Match the grant type to how much you can already prove with numbers.
- Neither grant guarantees the next one.
Sources and official links
Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.