The Myth of Government Grants
Starting a small business can take enormous amounts of time, resources and patience to succeed. Thankfully, there are programs and institutions in place that can help the aspiring entrepreneur get his feet underneath him and start out strong without having a reserve of immense capital. Unfortunately, those looking to start a small business with grant money from the U.S. or state government will be sorely disappointed. The myth of government grants for small businesses has been around for many years, owing much of its popularity to infomercials starring wacky guys that look like extras from the old Batman television series. These infomercials promise to tell you about the millions of dollars in free money out there for small businesses, if only you know go about getting it. It's all untrue. There is no free money. Not from the government. The small business grant simply does not exist. Unfortunately, the allure of free money is one that has the power to trap countless numbers of hopeful Americans. For this reason, the myth retains its power, as con artists the country over continue to use this misunderstanding to exploit hard working Americans to give up cash for the "secret to free government money."
All hope is not lost, however. One small extract of the myth holds true: There is money out there, and there is assistance. The government is not willing to support small businesses out of the goodness of the taxpayers's hearts, but it will give you some support, both financially and otherwise.
The Small Business Administration
The U.S. Small Business Administration, or SBA, could be the aspiring small business owner's best friend when it comes to getting their company off the ground. The SBA does not hand out grants, nor does it give out loans. However, it will put a fledgling entrepreneur in contact with private lending institutions, based on the owner's needs. This service is invaluable for anyone who isn't sure where to turn for their start-up capital. With the backing of the government, these lending institutions are often much more willing to help out the aspiring owner than they would be if they tried to seek out the loan on their own. This is because, for instances in which lenders find the applications less than worthy, the SBA will guarantee the loans, ensuring the lenders that they will not lose any money if the borrower fails to pay back the loan. To apply for one of these loans, you should contact your local bank.
USDA Rural Development Loans
If you're looking to start up a small business in a rural area, you have another fine option. The United States Department of Agriculture (USDA) has a program set up similarly to the SBA. It guarantees loans through their business and Industry program, purely for businesses located in rural communities. These loans can be used in a variety of ways by the small business capitalist, including for capital, inventory, real estate and even debt refinancing in some cases.
