The scheme offers up to £250 for individual childminders or £500 for larger businesses during the 2013/14 financial year.
The £2m fund is intended to prompt 6,000 childcare businesses to launch by helping founders pay for expenses such as legal and insurance costs.
However, the programme was criticised by early years professionals when it was announced in late 2012, who said that the money on offer was too little to cover the expenses incurred in setting up childcare businesses, including registration with Ofsted, first-aid training and health and safety adaptations in home premises.
Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “The £2m allocated may just about cover insurance costs alone, never mind the cost of purchasing equipment, toys, books, rent and rates, salaries and other core expenses.
"We would have preferred the government to allocate the £2m towards paying existing settings an effective rate under the free early years entitlement as a small capital injection is no substitute for a long-term viable proposition, which is what the sector really needs."
Leitch also questioned the scheme's emphasis on women. "The government ought to be encouraging more men to start businesses as childminders or day nurseries. Childcare is not women’s work alone and the government needs to acknowledge this in its policies.”
However, Maria Miller, minister for women and equalities, said she hoped the scheme would “get more women into work”.
“We all hear how difficult it is to get childcare and how it is a real barrier for some women getting back into work and we have listened,” said Miller.
“More childcare options mean more women can take up jobs, help support their families and achieve their own career goals and aspirations.
“The childcare industry is already a major employer of women, and this scheme will mean more opportunities for female entrepreneurs to start up and run their own businesses.”
Catherine Farrell, joint chief executive of the Professional Association for Childcare and Early Years (Pacey), warned the money would fail to provide childcare in areas that were in most need.
“These grants, if administered effectively, will provide a welcome contribution to the significant costs of establishing a nursery or childminding setting and support expansion of existing provision,” said Farrell.
“However, Pacey has become increasingly concerned that the mechanisms proposed to distribute the grants will be open to misuse and, potentially, mean this vital support does not deliver the childcare places where families, including those with disabled children, need them most.”
Miller also announced that Liberata UK, which provides business support services, would manage the scheme on behalf of the government.
All those who receive grants will also be offered start-up advice and mentoring through the government’s Business in You scheme.
Information about how to apply for the grants is available on the Government Equalities Office's website.