The Community Transport Grant will fund costs associated with starting up and operating a scheme.
Funding is available for vehicle purchase costs, IT software that supports effective operation, marketing of schemes and training of staff or volunteers.
The grant –which is also available for existing schemes – is a match funding grant, and applicants will need to cover costs of 50% from other sources.
Since 2016, residents of Thorncombe, near Chard, have seen two rural community bus services as a lifeline, allowing them to get to the towns of Axminster and Chard.
David Marsh and his wife Mary, who lives in the village, keeps the service going by organising fundraising events throughout the year with the help and support of local people in the village.
As a local councillor, Mr Marsh organises the community transport fund through the Thorncombe Parish Council, and the money raised, will be match-funded by Dorset County Council.
Mr Marsh said: "Following the withdrawal of the subsidy from weekly rural bus services in Dorset last April, we had to look at alternative ways of supporting these vital services.
To be as cost effective as possible, Dorset Community Transport runs the Thursday bus services to Chard and Axminster as one bus, explained Mr Marsh.
"Without these community buses, elderly people, and people who don't drive would find themselves very isolated with very limited services in the village.
"The buses are very popular with local residents.
"We are grateful to the Dorset Community Transport, who runs these services and always do their best to accommodate people's individual needs and mobility issues."
The funds to keep the service going are raised by having breakfast clubs, quiz nights, coffee mornings/craft fair and raffles.
Peter Finney, the county council's cabinet member for environment, said: "We are committed to providing transport that meets the needs of many of our most vulnerable and isolated citizens.
"The community transport sector is highly valued by those who are unable to access conventional public transport services, not just because it gets them from A to B but also because of the social benefits it provides.
"We want to support the voluntary sectors and individuals to deliver independent, sustainable services for the residents of Dorset."
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