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GRANTS - The True Story
In spite of what people see on television or hear from
friends, the fact is there is no government agency or private foundation
handing out free money to start small businesses, regardless of the money
seeker's gender, ethnicity, or economic status. Everyday our office gets
calls from people convinced there's "free money"
out there to fund business start ups.
The fact is that most grants are awarded to non profit organizations.
A few go to businesses that do research and development geared toward
crucial government projects. These grants are extremely specific in nature
and often quite technical.
For example, there is a tiny grain of truth in those late night TV infomercials.
There is a program called "Small Business Innovative Research"
which does award grants of up to $100,000 to research ideas that seem
promising, and then to develop products if the research is successful.
However, most of these grants are for projects such as how to put a satellite
into orbit and then repair it. These funds are not available to people
who are interested in opening restaurants, hair salons, and other more
common small businesses.
If the government provided free money to everyone who wants to start a
small business, it would not last long. And can you imagine the outcry
from taxpayers if their money was funding these risky ventures?
There are a few instances that one can obtain "free money".
One program is called PASS that is administered by the Social Security
Administration. If you are an officially designated disabled individual
you may qualify for a small Grant." Another source is Vocational
Rehabilitation administered Division of Rehabilitation Services. It is
a lengthy process. Here again one must be classified as disabled. There
are separate handouts on both of these programs in our Library on this
web site.
The fact is that most new businesses are started with personal savings,
loans from friends or relatives, or small commercial or personal loans.
Perhaps one reason this "free money" myth is so prevalent is
that people are looking for an alternative to the work and detail required
to get a conventional loan.
The idea of writing a business plan and approaching a lender can be intimidating.
But think about it, are not you more likely to succeed if you do the groundwork
and research required? There is a reason procedures are in place for small
business loans. One of the most important factors in obtaining a loan
for a new business is the borrower's personal credit history. Lenders
don't care if you are male, female, black, white, Asian, Hispanic, young
or old.
The bottom line is: Can you pay the money back?
The Greater Knoxville Chapter of SCORE provides training and counseling
for individuals who want to start their own businesses, including finding
the best source of funding to start your own business. If you need help
return to HOME for review of the workshop schedule
and/or registration for personal counseling with an experienced business
mentor and advisor.
Source: Chuck Christiansen, SCORE Counselor
The material in this publication is based on work supported by the U.S.
Small Business Administration under cooperative agreement SBAHG-04-S-0001.
Any opinions, findings and conclusions or recommendations expressed in
this publication are those of the author and do not necessarily reflect
the views of the U.S. Small Business Administration. The information contained
in this publication is believed to be accurate and authoritative but is
not intended to be relied on as legal, accounting, tax or other professional
advice. You should consult with a qualified professional advisor to discuss
issues unique to your business.
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Copyright 1990. SBA retains an irrevocable, worldwide,
nonexclusive,
royalty-free, unlimited license to use this copyrighted material.
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