North East councils have "unfairly and deliberately" withheld emergency Covid support, some businesses claimed.
About 90 firms said they had been "wholly excluded" from funding because they are home-, mobile-, or community-based.
They said the region's seven local authorities had only taken into account fixed property costs.
Council finance chiefs said they were "not in a position" to help all 68,000 businesses in the region.
They said they had agreed a set of criteria for awarding grants to ensure "no significant differences in the support available across authority boundaries".
Rachel Douglas, who runs The Laundry Lodge in Northumberland, said it was "discriminatory and it is morally wrong".
"We all have fixed costs, but they are not being looked at," she said.
"If you don't pay rent for bricks and mortar then you aren't eligible."
Driving instructors, cleaners, dog groomers and artists are part of an estimated three million people nationwide not eligible for Covid funding support, the Local Democracy Reporting Service said.
They have joined the "LA7 Excluded" campaign urging the region's councils to change their policy on allocating almost £40m of government Additional Restrictions Grant (ARG) money.
Department for Business, Energy and Industrial Strategy figures show only £5m of that had been handed out by mid-January, with Northumberland County Council awarding just 5.6% of its cash.
Campaigners said the figures showed "taxpayers' money is being unfairly and deliberately withheld from businesses, some whom are struggling financially and may never recover".
In a joint statement, the seven councils' finance directors said: "We feel that we have targeted the limited resources available to us appropriately and regret that we cannot support every business in need."
There was other support available to businesses and the self-employed, such as furlough, "bounce back" loans and the Self-Employment Income Support Scheme, they said.