How to Get Free Grants for Starting a Business?

| August 16, 2011 | 0 Comments

Question: I really need to know how can i apply for a free grant from the government. Can you give me the phone numbers emails etc. on where I can get free grant money to start my business?


Answer:

Free government grants for starting a business are not easy to find. From the Small Business Administration website:

The federal government does NOT provide grants for starting and expanding a business.

Government grants are funded by your tax dollars and therefore require very stringent compliance and reporting measures to ensure the money is well spent. As you can imagine, grants are not given away indiscriminately.

Grants from the federal government are only available to non-commercial organizations, such as non-profits and educational institutions in areas such as, medicine, education, scientific research and technology development. The federal government also provides grants to state and local governments to assist them with economic development.

Nonetheless, you can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov  - these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture (you’d be hard pressed to find any)

moneyFor your business to qualify for government grants, it needs to be considered for the  Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs, which fund the research and development of technological innovation that meets specific government needs.  You can also qualify for grants if your business is involved in developing or exporting agricultural goods, including food and forest product.

Your best bet for grants actually will be the states. Some states offer grant programs targeted for specific interest groups, such as women, minorities, women, disabled, veterans, etc.

Louisiana, for example, has the  Child Care Refurnishing Grants, which was given to daycare businesses affected by Hurricane Katrina (but it was for existing daycares, not those who want to start a daycare)

Maryland has a grant program called Small Business Development Financing Authority (MSBDFA), which “provides financing for small businesses that are not able to qualify for financing from private lending institutions or owned by socially and economically disadvantaged persons.” One of the component of the program is called Equity Participation Investment Program’s (EPIP):

The purpose of this program is to enhance business ownership of socially or economically disadvantaged entrepreneurs. Financial assistance is provided through the use of loans, loan guaranties and equity investments.

While Maryland offers grants, the grant does not provide free money to those starting a business and free reign as to what business to start. Instead, the grant funds would-be entrepreneurs with loans, loan guaranties and equity investments.

Some non profit organizations, such as women organizations, can be a source for finding grants. The best resource for this is Foundation Center http://www.fdncenter.org . They have a very good database covering all organizations giving grants and you can find foundations that are interested in supporting your type of cause. However, it’s a subscription based website and you will need to pay to access their listings.

 

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Category: Financing

About the Author ()

Isabel Isidro is the Managing Editor and Co-Founder of PowerHomeBiz.com. Her goal is to help small businesses do big business. Visit her at PowerHomeBiz.com Small and Home Business Blog, Women Home Business, and Learning from Big Boys

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