You’ve heard the advertisements that suggest the government will “give” you money to start or expand your business. Others purport to show you how to tap into the hundreds of millions of government and foundation grants available to entrepreneurs and small business owners, none of which ever has to be paid back. And still others claim over 1 million entrepreneurs each year get free money to start or expand a business.
You’ve probably even considered the legitimacy of these claims because of these promises:
- the company guarantees you’ll get a grant or you’ll get your money back
- you’ll receive step-by-step instructions on how to write a winning proposal
- there are no special requirements and all taxpayers are eligible
- you’ll get sample forms and extensive bibliography listings, government and private foundation source books and publications.
What you’re likely to get is grant information with a catch: the organizations listed don’t usually give grants to individuals to start or expand their own business. And, you may find it difficult, if not impossible, to collect on the “money back” guarantee.
Every business owner would like to have a grant for starting or expanding a business. The fact is no government agency is handing out free money to start small businesses, regardless of your gender, ethnicity, or economic status. The harsh reality is that 95% of most small businesses are started with personal savings, loans from friends or relatives or commercial loans. The owner must invest their own money and collateral, because 100 % financing is not available. The U.S. Small Business Administration (SBA) does NOT make grants to business owners though it does offer a wide variety of loan guarantee programs.
Some government grants are available for small businesses but they are designated for very specific programs such as:
- highly technical areas of industry
- schools and training programs
- other state and local government programs
For example, the Small Business Innovative Research (SBIR) program offers funding for small firms to perform cutting-edge research & development that addresses the nation’s most critical scientific and engineering needs. These needs span the technology spectrum — from aviation and agriculture to medicine and manufacturing.
SBIR is a federal government program administered by 10 federal agencies for the purpose of helping to provide early-stage research and development funding to small technology companies. SBIR funding is extremely competitive and has an intensive application process.
Grants that are available address societal problems. There is not a single list of grant providers. There are literally thousands of private and public funding sources. You can find information about grants at your local library and on the internet for free. Every funding source has eligibility requirements. If you do not fi t the eligibility requirements they will not give you money. Every grant has required activities, if they are not carried-out, you may have to give the money back.
