The Truth About Business Grants
The business development community often jokes about the much-hyped grants to start your business. First off, who would ever GIVE you money so you can make money? Even if your family invested in your business, they eventually want the money back. The US government, yes the same government that buys $1,000 toilet seats, will only loan you money to get started. Actually, they do not provide the loan, they only guarantee the loan. Even charities (like Kiva or Grameen Bank) who raise money for women to start cottage enterprises in the poorest of third world countries, only provide loans. Even they want their money back.
Spam and Late Night Pitchmen
Where the pitchmen and hucksters allude the law but not morality, is that yes, the US Government does give businesses grants. Yes, the US government does want more small businesses to start. The US Government does not combine the two. Yet, the late night pitches and the email spammers, take from column A and from Column B, saying that if you buy my training, kit, book, workshop, I will show you the “secret.” When I worked at a not-for-profit business development center, we were funded by a grant from the US Department of Commerce. We were tasked to help minority businesses grow, and had some stiff requirements. We would get calls people who bought into this book or that training, asking about the grants. The grants they were asking for was the grant we were funded by! In other words, without understanding anything about what they put in the book, they just saw grants, minority, business, and listed our center as the local contact. People would get irate because the $1,000 weekend training workbook said that we had grants available. Sorry, and you just spent $1,000 for what you can find on the Internet for free.
There Are Grants But…
As mentioned before, there are grants available for business. However, these are typically for research. The government has to get something for its money, even if it’s a $400 hammer. At times there are grants available to provide a service (the above business center grant was open to for-profits). Other times there are grants that can be done to partner with a not-for-profit, municipality, educational institution, for some desired outcome. Still, these grants should not be thought of as venture capital or angel investors (money to move your business or idea forward) but as customers. Essentially, the US Government is buying a service. You still have to perform, keep records, and ultimately be accountable to the US Government Accountability Office (attorneys and accountants who love carrying guns). These are not grants to fulfill your life long dream to own a gift shop, or open a night club, or become a house flipper. These are services the government is buying from businesses that are already doing the work. It’s semantics getting in the way. These are less grants and more contracts.
Here is an article from Business Week about business grants.
You may also enjoy Finally! Someone Putting Their Money Where Their Mouth Is.
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FTC recently came down hard on online grant marketers and web sites.
It is some Truth…To be negotiable…
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