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In spite of what people see on television or hear from friends, the fact is there's 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 is 'free money' 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 program called 'Small Business Innovative Research' which awards grants of up to $100,000 to research ideas which 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; grants are awarded after successfully completing a series of stages and the competition is very stiff. These funds are not available to people who are interested in opening restaurants, hair salons, and other more common small businesses.
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If the government provided free money to everyone who wants to start a small business, it wouldn't last long. Millions of dollars would be wasted on businesses that had not done the research and groundwork necessary to help ensure it’s success. And can you imagine the outcry from taxpayers if their money was funding these risky ventures?
The fact is that most new businesses are started with personal savings, loans from friends or relatives, or small commercial or personal loans. One reason this 'free money' myth is so prevalent is that some people are looking for an alternative to the work and detail required to get a conventional loan; an “easy-way-out” to coin a popular phrase. The idea of writing a business plan and approaching a lender can be intimidating.
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Related Articles on the Internet
SBA Webpage for grants:
www.sba.gov/expanding/grants.html
FTC's article about wealth-building scams:
www.ftc.gov/bcp/conline/edcams/getrich/
Other good articles:
www.home-business-savvy.com/home-business-grants.html
www.msnbc.com/news/674048.asp?cp1=1
(Excellent article from Dateline NBC)
center4debtmanagement.com/Bookshelf/Articles/WealthScams.shtml
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But think about it-aren't you more likely to succeed if you do the groundwork and research required? There's a reason procedures are in place for small business loans. Would you personally give away your hard-earned money to someone you have never met before, who has not done the necessary work to help ensure the business’s success, and who refuses to accept any risk in the venture themselves? Of course not; neither will our banks and especially not our government. However, there is a lot being done to help small businesses get started and succeed. With a representation of approximately 99% of all employers in the United States, small businesses are the backbone of our economy. Because of this, organizations like the Small Business Development Center exist to help small businesses succeed, prepare the necessary paperwork and documentation to help ensure success and apply for funding, and help the entrepreneur in anyway possible. The U.S. Small Business Administration guarantees small business loans to help entrepreneurs and small business owners receive the capital they need to help their business succeed, and traditional and non-traditional loan funds are established to provide numerous sources of capital for practically every business sector.
If you are depending on a grant to start your own small business, don’t waste too much of your time; chances are you will not find one. However there are numerous sources of small business loans available from a wide variety of different lenders for your business’s needs.
The Small Business Development Center of Southeast Community College provides counseling and training for individuals who want to start their own businesses or who are currently in business. We help individuals, like yourself, daily to make their business idea a reality and show them how to dramatically increase their probability of success. Contact us today to put your dreams into action.
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