Do Small Business Grants Even Exist?

By Rhonda Winn

The idea of obtaining a small business grant, for many small business
owners, is great. After all, unlike a loan, grants are funds that don't
have to be repaid. Many of us have heard various sources proclaiming to
have the secret to obtaining small business grants and they may very
well have a legitimate listing of grantors (organizations or
individuals that award funds to others for a specific purpose). But if
you don't know the real deal about small business grants you may be
wasting your time and your money.

The idea of obtaining a small business grant, for many small business
owners, is great. After all, unlike a loan, grants are funds that don't
have to be repaid. Many of us have heard various sources proclaiming to
have the secret to obtaining small business grants and they may very
well have a legitimate listing of grantors (organizations or
individuals that award funds to others for a specific purpose). But if
you don't know the real deal about small business grants you may be
wasting your time and your money.

The allure of these so-called small business grants is understandable.
Small business owners are always looking for ways to minimize their
financial risk so why not try to get a grant? But there is a lot of
hype out there, especially via the Internet. This could leave grant
seekers scrambling and disillusioned. But the fact is grants do exist.
The hype comes in when people start spreading the myth that there is
this catchall fund for any business owner looking to obtain some extra
money. That is just not the case. It's not as easy as filling out an
application and you get a check in the mail. You could get turned down.
Your business may not meet the criteria. Or worse, you might have had
difficulty even finding a grantor.

First, let's take a look at what type of grants are available. In
general, a grant covers the costs for work or supplies for a given
period of time such as a grant renewable for two years. And they are
typically meant to fund acts or services that improve social
conditions, education, community or aid religious or cultural functions
in specific areas.

1. Grants to individuals usually for research or education.

2. Grants to for-profit businesses. These are not as numerous as
non-profit organizations or non-profit businesses so almost all
for-profit business grants come from government agencies. Check out
your local agencies for additional details.

There are literally billions of dollars of grant money awarded each
year. The people awarded this money have done a considerable amount of
background work. Many of the people who seek out grants, or "grant
seekers", have professional grant writers to research and write grant
proposals. Grant seekers must research companies and agencies first to
find out what they have to offer that fits the grantor's specifications.

It's important to realize that many grants that are available cannot be
awarded to small businesses because in many cases, a small business is
operating for a profit. Foundations cannot give grants to for-profit
businesses because they get a special tax exemption that renders this
illegal. Knowing that little fact will give you realistic expectations
when seeking out grant funds.

Common Grantors

• U. S. government through a variety of agencies



• Corporations



• Foundations



• Charities
  
  
  

Grant Seekers Awarded Funds

• Non-profit businesses or organizations



• Schools



• Churches

Businesses that meet the specific criteria of the grantor in regards to location, ownership, services, or employees.

Your chances of obtaining grants for your business dramatically
increase if you have a non-profit organization. A common misconception
is that non-profit organizations don't make money but this is not the
case at all it just means that you operate solely to pay wages,
vendors, and purchase necessities. At the end of the year you should
break even. So if you have an idea that could improve the lives of
others through social works than you could possibly find a grant to
help you reach your goal.

If you have a small business and need help getting started then be
prepared for the challenges ahead. Finding grants may not be easy but
they are out there. Checking with local government agencies is the best
place to start. There are local small grants in some cities that are
available if you either operate your business in certain areas or your
business will benefit particular areas.

Whichever type of business you operate, be diligent in your search and
make sure you have read the grantor's requirement carefully. With
enough effort, you can have money for your business and reduce your own
personal risk of starting a business.

Copyright © 2005-2006 Rhonda Winn - All Rights Reserved. Rhonda Winn offers free small business resources and business plan templates at her web site http://smallbizstartupkit.com Visit today to sign up for a small business e-course and receive three free small business e-books instantly.

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