Grants? No, not available for what you are looking for. The very few grants that are made available to for-profit businesses are usually very small ($500-$1500) and the competition is unbelievable. Don't waste your time or resources going down that dead end.

With both of you having serious credit issues, you likely won't be able to get a traditional loan. There are still options out there if the total amount is not outrageous. $40,000 sounds like the minimum he would need?

Realistically, it's going to be a long shot. I offer some other options in my start up kit below.