Where do I enter a taxable grant reported on 1099-G as business (and not as private) income, so that self-employment tax is paid on this grant?

You can enter it under your Business income in Other Income. Then enter a description 'SBIR Grant reported on 1099-G' and the amount.

The amount will flow to line 6 of your schedule C and be included in gross income and net income will then flow to the schedule SE.

I'm afraid IRS wont notice this as reporting the government grant income reported to them on 1099G