Small Business Grants

Posted on 09. Mar, 2009 by Adam in Business, Entrepreneurship

You’ve probably heard the hype about all the free money that the government has stashed away somewhere in a secret, undisclosed location to give away to small businesses.  Remember those commercials with Matthew Lesko, the screaming nerd in a suit covered with question marks?  He was hawking his book that was supposed to be full of resources on locating and applying for those very grants.  Most people believe that there is ‘free money’ out there to start up a business, but like most things governmental, it seems to be pretty evasive.

So what is the deal with government grants for small businesses?  Do they exist?  And if so, where are they?  The government does indeed provide grant money to small businesses, but not surprisingly it is far different than what Matthew Lesko or other people trying to sell books/programs/coaching have to say.  Many misguided folks are under the impression that they can come up with any old business idea and apply for a grant—FREE MONEY—to start that business up.

In reality, government funding is set aside for very specific purposes.  A small business than qualifies  to receive that money must fit into definitions, and even then the process for receiving a grant is a long, complicated one that is fraught with competition and lots of bureaucratic hoops.  The government requires extensive business planning, reporting, and compliance and there must be a way to specifically measure your growth.

Another issue to consider is that government grants take time.  If you’re waiting for a government grant to get your business off the ground, you have to take into consideration that these funds are often awarded annually.  The application process is tedious, and you must actually write a grant proposal that follows specific guidelines.  Any deviation or mistake can get your proposal thrown out and you are back to square one.

How do you know which government grants are available to you as a small business?  You want to go to your state’s economic development website and look there.  Federal money is given to states to develop small businesses in the specific areas where they see a need, and opportunities vary greatly from state to state.  Here is a good list of links to economic development website by state:  http://usgovinfo.about.com/od/smallbusiness/a/stategrants.htm

Another great resource is the SBA (Small Business Administration) which has a large amount of valuable information on its website.  Most communities have an SBA branch where you can talk to a representative about the funding options available from the government.  Keep in mind, however, that the SBA does not offer grants or loans itself.  Even if you are looking to borrow money, you’ll still need to work with a traditional bank which is backed by the SBA.

There is money that can be put to work in small businesses in the U.S., but contrary to popular belief, it is not sitting around in a vault somewhere just waiting for applications.  That money is set aside for very important social and community development.  The key to winning any of it is making sure your business helps to meet some of those needs, and then being able to prove it to the government.

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Tags: grants, small business

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