You must have seen several ads about how to get “free” money for your small business. Is there really free money available for your businesses?
While the government does offer grant money, it is not easy to qualify or receive as some may lead you to believe. There are hundreds of scams out there that entice small business owners with the promise of free money, for a small fee.
These scams work by guaranteeing that you will get a small business grant or you will get all your money back. They charge you a fee of about $50 for a packet with information on how to write your grant proposal and a list of organizations that can provide the grant you are looking for. Unassuming business owners pay this fee and receive information with a list of organizations that don’t give any business grants. When you try and get your money back, you find that the guarantee was just a hog wash.
Does that mean there are no small business grants?
There are, but are rare, and the information you need to find and apply for the legitimate grants is available “free” of charge. For businesses that qualify, there is a possibility of getting free grants from the county, state and city governments. There are also some private corporations and foundations offering these grants.
Grants for Technology Startups
Businesses that stand the best chance of getting grants are technology startups. As long as they match the extremely stringent requirements, the federal government’s Small Business Innovation Research (SBIR) and Small Business Technology (STTR) programs are there to help. They award more than $2 billion in grant funding each year.
Small Technology Focused Businesses
Many state and city governments offer grants for small businesses that focus on technology. In Ohio, TechColumbus offers grants to help entrepreneurs test their ideas and see if they can actually run a business. In Philadelphia, The Ben Franklin Partnership and in Gardiner, Maine, the Maine Technology Institute are just a few of the many organizations that help local tech companies out.
Small Business Certifications – Non-tech businesses may not find it as easy as tech-focused businesses to get a grant. But it is still possible if you do the needful. The first thing to do is to check if the business qualifies for special small business certifications, such as minority-owned, woman-owned, veteran-owned business or disadvantaged business. The state and federal governments usually give preference to such business owners.
Economic Development Agencies – You can then look at the economic development agencies or similar agencies in your local area. Many of these agencies offer government-sponsored grants in an attempt to help with the expansion of existing businesses, help new businesses get started, train employees etc. For example, workforce training grants are offered by the Central Oregon Intergovernmental Council for businesses in the counties.
Get Grant Information – The next step would be to sign up at Grants.gov and get information related to different kinds of federal grants. It may not be easy to qualify directly, but it is certainly possible to get a part of the funding with a little innovative thinking and some networking.
Workforce Training Grants – Workforce training grants are a great source of funds. Many states have these grants and you can check out for grants within your state. You will also be able to get more information through community colleges or workforce investment board. Some states fund more than $10 or $20 million which helps hundreds of companies.
Foundation Grants – You can also look at foundation grants at the Foundation Center that provides you information on U.S. based foundations, public charities that give grants as well as corporate giving programs. While grants from these places are meant for non-profit organizations, you can make use of them intelligently by creating a non-profit front for your small business. You can attach a non-profit section to your existing services or products business. For example, a children’s theatre company can have a non-profit section that teaches after-school acting classes.
Irrespective of the grant you apply for, you must understand that the cash is usually meant for funding specific products or projects, not for companies. If you are looking for free money, you must also be ready to fit into the requirements by making changes to your business structure as needed.
Apart from that, businesses that do obtain grants cannot spend the money as they please. They will have to abide by the strict rules and regulations concerning how the money can be spent and the percentage of money that can be used for specific purposes. These requirements will have to be complied with.