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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Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website
http://www.business-idea-grants.com/

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Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business liscence, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid sccams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.

Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website
http://www.homebusinessit.com/

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Starting A Internet Business - Be Aware of Get Rich Quick Business Myths

Of the numerous myths out there the ones that we as business men and women need to pay the most attention are the many ‘get rich quick’ schemes and emails such as those claiming to allow you to get rich if you just send one dollar to the three people previous to you on the list etc. – it is difficult to understand how or why someone would start a chain letter like this since any hope they had of gaining funds would require that they make themselves available to prosecution for the pyramid scheme on which the concept is based by having their mailing address in the email, but the fact that so many people not only read the emails but indeed do send off money ‘just to see’ tells us a lot about the gullibility of people and the inherent desire to make money without really having to work at it.

There is not such a thing as a free lunch … at the very least someone has to be paying for it and ignoring this truth will only cause you pain and trouble. The easiest way to discern if a business email is a lie is whether it promises you unheard of returns for very little to no work or involvement – if it’s too good to be true it is.

Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website
http://www.business-idea-grants.com/

Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business liscence, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid sccams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.

Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website
http://www.homebusinessit.com/

Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program

Start Up Business Myths and Legitimate Home Businesses

To give you an example and discuss a few of the many myths that cloud the concept of starting a small business let’s go over five of the most common myths that typically surround the small business owner and discuss their merits and the facts in each instance.

First and foremost it is important not to listen to too much of the negative statistics and fear-mongering that commonly are thrown about because just as hearing ‘the odds of successfully negotiation an asteroid field’ for a common pilot don’t necessarily apply to certain skilled Star Wars hero’s so also may those statistics of people who didn’t do their homework or research their market not apply to you. In short many of the things you will hear and run into are not facts – they are urban legends, misconceptions about starting a business that have been repeated so often now that many people believe them to be true even when they ought to know better.

There is free money available to help you start your business

If you have never heard this old saying before turn on the old memory chip, “There Ain’t No Such Thing As A Free Lunch. TANSTAAFL.” If something sounds too good to be true it not only probably is I can guarantee you it is! Our government only gives away money to foreign interests with whom they feel they can buy loyalty or concessions – not to their citizens. While it may be true that some state governments have policies in place to help people such as veterans, minorities or people with disabilities those special programs have very specific requirements that you have to meet before you are eligible. If someone claims otherwise, especially if they want to charge you a fee for a ‘list of lenders and free grant providers’ run do not walk away from them!

The Small Business Administration has millions of dollars of money available to loan directly to small business

The SBA is an independent agency of the executive branch of the federal government, and as discussed previously the government is not in the habit of giving anything away. That includes loans, believe it or not! The SBA is a great resource for small businesses, and does act as a guarantor for one of three different loan programs that can be of use to the small business owner, but they themselves do not provide or arrange for the loans.

The three loans they act as guarantors for include the Seven-A (7a), the Five-O-Four (504) and the Seven-M (7m) or “micro-loan” as it is known. Some details about these different loans which the SBA will guarantee and oversee compliance with for small businesses follow for your benefit:


 The 7(a) program is a flexible lending program which allows qualified small businesses to obtain financing in certain instances if they have been turned down through traditional channels.
 The 504 loan helps small businesses with fixed-rate, long-term financing for equipment, property or machinery needed for expansion or modernization.
 The 7(m) program aimed at both small business and not-for-profit child-care centers provides short-term financing for working capital and the purchase of inventory, supplies, furniture, fixtures, machinery and equipment.

What the SBA does in these types on situations is to help arrange financing through various lending partners including local banks and nonprofit corporations and to oversee compliance on the part of the small business with the loan terms, thus assuring to the lenders that the loan will be repaid.

People are lining up to loan money to startup companies

Venture capitalists DO exist, and while in some cases they have been known to finance startup companies that is not what they principally do, nor would it be wise to do so. Since a venture capitalist entire purpose of investing into a company is to make money and more then half of the startup companies created every year go belly-up just leaving that money in the bank earning 5% would do a better job them financing startup companies hand-over fist.

One of the rules of thumb that investors use is that a good three year track record needs to be in place, along with a great business plan and the potential at least for robust growth before they are willing to put their hard-earned money on the table. If you can show a great strategy with strong growth potential and have a product or service with a national client base that has so far been untapped you may be able to get them to bend a little – but the thought that investors are actively looking for someone to give their cash to is definitely an urban legend!

Starting your own business allows you freedom to choose your working hours

Only someone who has never had a job like raising kids, or farming that has tasks to be done whether you are sick or not would ever come up with a saying like this, and yet it is one of the most common business-owner myths out there. Unless you have so much money that you don’t need your business to succeed any ‘freedom’ you have will be going right out the window the moment you open your small business or shop! You may have a bit more flexibility in the scheduling of your free time, but starting a small business will definitely cut into that free time if you plan on making it a success.

There are many write-offs you can take on things you otherwise can’t write off

The IRS and the government do NOT give away money. Remember that – that is the reason for myth number one and two above, and unless you enjoy being audited it’s never a good idea to write off any expenses not 100% related to your business endeavors even if they are used in relation to the business as well as your personal life. The best rule of thumb is to ask yourself whether or not you would still have this expense (say your car for instance) if you were not running the small business, and if so in any form or fashion then it is not a legitimate write-off.

Some common write-offs which are normally allowable include any computer and business software, rent, salaries and monies paid to independent contractors, advertising costs and even a percentage of vehicle costs if its use can be tied to the business in question. In some cases strict rules apply, such as whether you use the computer for personal use as well as business etc. so checking the law first is a good idea!

As the business owner you can set your own salary

Remember that caveat that keeps coming up about TANSTAAFL, the lack of a free lunch? If you give yourself too high a percentage of the earnings the IRS code that refers to ‘unreasonable compensation’ may cause you to discover what an audit, as well as business failure, is all about. Cash flow is the key to a successful business, and a surprisingly large amount of the incoming cash has to flow right back out again in the form of investments, advertising and expenses to keep a business on the path to growth. Not setting enough aside for this is one of the reasons so many startup companies do fail in their first two years.



Any Internet site can earn money for the owner

I hate to harp, but TANSTAAFL strikes again … if you have a website that has a lot of traffic due to unique content or placement that’s awesome, and as such it does indeed have a more then reasonable chance of earning you money – but just because you have a web site doesn’t mean business will magically come your way. Even the best created and designed site on the web if it is not promoted and linked properly is destined to fail – so don’t blow all your budget on a spiffy site when you haven’t decided what you are going to focus on selling yet!

An expert should be able to become profitable within six months

While not unheard of just having knowledge and skills doesn’t mean you will be able to turn a profit, and most small businesses due to startup costs and need to invest back into the business for future growth don’t see anything out of their company for at least two to three years … again if it sounds too good to be true!


The right business sells itself and doesn’t need a marketing or business plan to succeed
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This is very common now in the post ‘dot-com’ era, but remember folks there is a reason it’s the “post” dot-com era and not the dot-com boom. There is simply no substitute for a valid business plan and understanding what is necessary to sell your product or service to the public. Anyone trying to tell you something otherwise is likely selling something he wants you to buy from him right now before you go broke and give up the idea of starting your own business! A related myth is that if you aren’t getting a loan or looking for investors you don’t really need a business plan. While business plans are necessary to get investors the purpose is not that but to ensure you understand what it will take to be successful, and that you have a linear outline for how to achieve those goals.


Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website
http://www.business-idea-grants.com/

Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business liscence, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid sccams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.

Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website
http://www.homebusinessit.com/

Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program