Thursday, October 15, 2009

Grants for Businesses

Calls have increased lately for people who want to know more about grants for starting a business or funding a business expansion. I find it increasingly difficult to convince people that their chances of accessing grant dollars are extremely slim (to none) as more and more information is provided to the public about Stimulus Funds. Everyone seems to think that Stimulus Funds will automatically provide 'free' funding for business start-ups and expansions.

At the risk of sounding like a broken record, I would like to clarify a few points:

1) Business development grants are typically given to economic development agencies who are charged with dispensing funds through a revolving loan fund program. Although the economic development agency receives the funds in the form of a grant (and may be called a 'business development grant), the funds are disbursed in the form of a loan with typical loan payback requirements to the business applicant. There are usually job creation goals and other parameters associated with the loan. It is always wise to check on the eligibility components of a revolving loan fund before assuming that your business might qualify. Keep in mind that these funds are a loan to the business, not a grant!

2) Other types of business grants might be in the form of a municipal program where a specific municipality has applied for funds that are made available to local retail establishments to improve store-fronts or encourage other building improvements. It is typically a requirement that the business prove that they are economically viable.

3) Energy grants might be available to some businesses for specific energy-related programs. Again, the business may need to prove that they are economically viable.

4) The government may provide grant opportunities to businesses that are providing a valuable product or service that is vital to the public good. For example, if a business produces a product that will be beneficial to the war effort, the government may provide some grant funds to assist with additional research and development. When the government provides grant funding, in most cases the business needs to understand that -
  • The business may be required to match the funds. For example, if the business wants to request a $100,000 grant, the business will need to put $100,000 into the total project costs.
  • The business must show that they are financially stable and will be required to provide internal financial information to prove that they are a viable business.
  • The grant may have a component that requires that the business partner collaborate with an institution of higher learning to complete the research and development.
  • Lastly, there are numerous reports and parameters that need to be met, depending on the grant requirements.

5) In the past, the government has provided grants for child care facilities. However, grants of this nature are few and far between now that more child care facilities have been established nationwide.

Suffice it to say, anytime that the government makes a grant, it comes with eligibility requirements and, if one wants to take the time to read a Request for Proposal (RFP) one will find those eligibility requirements are clearly stated.

No matter what you read on the internet no one can guarantee that you will get a grant! There are countless 'entrepreneurial' folks who will be happy to sell you a book and sign you up for technical assistance and the cost may be as little as $39.95 up to $2,000+. Believe me, I have had clients who have purchased books and paid $2,000 for what they thought was a guaranteed grant only to find out that they were sold a bill of goods.

All government grant opportunities are posted publicly and can be accessed at no charge on official government websites. Let me emphasize here that it is the official government website that you want to research. Be wary of websites that want personal information and that have an appearance of being an official governmental website.

On the Federal level, the official site is:

http://www.grants.gov/

For the State of Washington the official site is:

http://access.wa.gov/business/grants.aspx


There are also many technical assistance providers who will promise that they can get you a government contract. Government contracts, contrary to popular belief, are not awarded in that fashion. If you want to know more about contracting with the government, see your local Small Business Development Center for no-cost advising services.

If you are seeking funding for your business, contact your local SBDC. Business advising services are available at no charge to business owners and eligible start-up operations. The Washington State SBDC website is located at:

http://www.wsbdc.org/

1 comment:

  1. Present your proposed budget for the grant money. Be as specific as possible, explaining how the money will be used and why. Offer charts and graphs to show allocation and expected growth. commercial loan rate

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