When it comes to government small business grants there are two camps. The first camp says that federal and state governments give away lots of “free” money to help you start or expand an existing business. The other camp says there are no such grants available. So which one’s right?
If you want to see for yourself you can logon to the Small Business Administration or Grants.gov websites. But we’ve already checked into it and we’ll tell you upfront the second camp is correct. Federal and state governments do not give small business grants except under extremely rare conditions. About the only time government business grants become available is when there’s a vested government interest in promoting a specific technology. Other than that, business owners are out of luck.
Why do people sell books offering information on government grants?
Some 30 years ago a rather industrious author figured out that people watching late-night television would believe just about anything they were told. This enterprising individual decided to publish a book highlighting all the “free” money available from the government including so-called government small business grants. The author put together some very convincing commercials, ran them on late-night television, and sold millions of books. Unfortunately, not a single purchaser of his books has ever found grant money available for small businesses through a federal government institution.
By the same token, there are lots of websites that come up in a Google search if you run the phrase “small business grants.” Unfortunately if you start to look at those results you’ll quickly find that you’ve wasted several hours coming up with information that is completely useless to you. Why would these website owners do this? Because, like the author of the previously mentioned book, they generate income when you visit their site and click their links. If they’re promising government small business grants, don’t believe them.
Are there any small business grants of any kind?
The good news is that from time to time it is possible to find small business grants from places other than federal or state government. For example, sometimes local governments offer business grants in combination with tax abatements as a means of stimulating economic growth. They are hard to come by during these tight economic times, but you can find them every now and again.
Secondly, private business trade groups and foundations sometimes offer small business grants as a means of helping people in genuine financial need. These types of grants typically don’t equate to tens of thousands of dollars mind you, but even a couple thousand dollars can be beneficial when you’re starting or expanding a business. The only way to quickly and effectively find these opportunities is to do an Internet search on private grant makers.
If I can’t find grant money how do I fund my small business?
If you’re willing to accept funding other than grants, that’s where you’ll find you have plenty of choices. From the government standpoint you have small business loans backed by the Small Business Administration and other government agencies. And in fact, the SBA website is one of the best resources for finding those loans. The SBA does a good job of keeping users abreast of all sorts of loan programs available throughout the United States.
Next, you can check with your local banks and chamber of commerce as well. If local banks are unable to help with financing they probably can point you to other institutions that can. The same thing goes for the chamber of commerce.
Finally, you can consider accessing private equity investors. Just do an Internet search on private equity companies and start looking at some of the results. Just about every private equity firm offers a link on their website whereby you can contact them for more information about attaining funding.
How do I obtain small business loans or private equity funding?
Applying for business funding is somewhat different than getting a personal loan. While you may have to fill out a formal application, more important will be your business plan. When you submit a business plan you are essentially explaining to the lender or private equity investor why your business is worthy of funding. There are no black and white rules for preparing a business plan, but there are plenty of free samples online that will help you put one together.
In closing, if you do find small business grants available from private organizations you’ll also need to submit a grant proposal along with your business plan. If you don’t know how to write a grant proposal there are as many resources available for that as there are for writing business plans. If you’re still not comfortable and don’t mind spending the money, there are organizations that specialize in writing grant proposals.