If you’ve been searching the Internet for a place to find minority business grants you’re probably frustrated by now because you haven’t found any useful information. We would ask you to read through this entire article because it contains the truth about business grants in general. Far too many minority business owners spend hour after hour searching for grant money only to come up empty at the end. In this article we won’t lie to you. We’ll tell you the absolute truth about minority small business grants and then point you in the right direction.
Below is a list of facts regarding minority small business grants you need to know. All of them are verifiable by checking with the appropriate agencies.
Fact #1 – Federal and State Governments DO NOT Provide Minority Small Business Grants
Unfortunately there is an entire industry centered on scamming people into believing that federal and state governments are a source of free grant money. It is simply not true. You can look at the Grants.gov website or the Small Business Administration website. Both sites unequivocally state, without question, that federal and state governments do not give away grant money for small businesses. So do not believe it when people try to tell you otherwise. It doesn’t matter whether they’re selling a book, pitching a DVD, or just building a website designed to drive advertising revenue, they are lying if they tell you there are government grants available for small business.
Fact #2 – Federal and State Governments DO Provide Small Business Loans
When you visit some of these websites claiming the government gives away grant money they will often make themselves appear legitimate by providing links to government websites. Go ahead and follow those links by all means. What you’ll find is that the federal government and various state governments do offer financing through small business loans. Though some may believe this to be a simple disagreement over semantics, it’s not. By definition grant money does not need to be repaid; a small business loan does. You can apply for small business loans through dozens of institutions backed by the SBA.
Fact #3 – Private Grants Can Be Found but They Are Rare
Every now and again it is possible to find minority small business grants from private foundations and business organizations looking to help minority business owners. Yet they are rare, to say the least. In order to find out about these grants you must constantly keep your eyes open by staying in communication with organizations like the Small Business Administration and various industry and trade groups. When grants do become available be prepared that you’ll be competing with a lot of other companies for limited funding.
Fact #4 – You Do Not Need a Business Grant to Be Successful in Business
If you’re someone who believes that your dreams of business are lost if there are no minority small business grants available, don’t believe it. Small business grants have never been available from the federal government and yet look how many successful businesses there out there. It’s just a matter of being creative with your funding sources and pounding the pavement to get the money.
For example, you might check with an organization like the Business Consortium Fund, Inc. This organization specializes in helping minority business owners by providing them direction, information, and resources. They are an organization that can point you to funding resources available in your area.
Fact #5 – Private Equity Is Not the Bogeyman
Unfortunately, we have been trained in America to think negatively of private equity and corporations. It’s rather foolish when you think about, seeing as how they pump so much money into our economy and provide so many jobs. As far as private equity is concerned, their profit motive is what enables them to help businesses like yours get off the ground.
In other words, when private equity invests in your small business they do so with the intention of earning money. If your business fails so does theirs. And they will do everything in their power to make sure that doesn’t happen. When you get funding from private equity you are getting not only money but also help from their business experts to make sure you succeed.
Fact #6 – The Average Small Business Fails within Three Years
Statistics have consistently shown that the average small business in the United States fails within the first three years of existence. The primary reason for that failure is inadequate funding. The truth is that it takes at least three years for most businesses to begin earning a profit. That means you need enough funding to keep yourself afloat until that time.
As a general rule you should do your best to secure one year’s worth of business funding before you ever open your doors. With that much funding in place you can take everything you earn in the first year and set it aside for the second year’s funding. Do the same in the second year and, if things go as planned, you should be making money by the third year.
If you are a minority small business owner and you’re looking for funding to start a new business or expand an existing one, resources are out there. Don’t be afraid to call business organizations, trade groups, local banks, your chamber of commerce, and anyone else you think might be able to help. The deeper you dig, the more funding you’ll find.