Is there really such a thing as free money for a business? Does the government provide grants to start a business or pay off debts? Well certain individuals who dress up in gaudy suits covered with question marks, you know who I’m talking about, would certainly have you believe it’s true. But it’s not.
The Small Business Administration, SBA, does not provide free money for businesses. They do however provide money for loans and that’s the catch. When clown guy says a certain high profile business was funded by the government, it means the company got an SBA loan, not a grant. According the the SBA there are no grants for commercial purposes. There is no such thing as free money for a business.
SBIR, or Small Business Innovation Research Grants, are awarded by the federal government for research and development in the private sector by independent companies who are not dominant in their industry. The person applying for the grant must work full time in the company receiving the grant. There are two phases. Phase I and Phase II, only those companies who have already received a Phase I grant are eligible for Phase II grants. Grant amounts range from $ 50,000 to $ 500,000 and are competitive. Very competitive.
There are also grants awarded by private foundations to nonprofit organizations. Most businesses are for profit, or at least trying to make a profit.
Can you find grants in the private sector that are awarded to businesses? Yes, but these are usually either very local, or very specific in how the money will be used, in what industry, and where. If you’re looking for a grant, try your local chamber of commerce, Small Business Development Center, SCORE office, or state development office.
Just keep in mind the odds are a long shot.
There really isn’t such a thing as free money for businesses.
Do you need a small business loan, credit card, or grant? Want to know about other ways to finance your business? Find out more at 58 Ways to Find Money for Your Business