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Monday, November 17, 2008

Government Grants For Small Business .... Myths And Facts

Following is from a rather insightful exchange between Alan Beckley and Joseph Graben in response to a question from John Madigan at Linked-In.com.

There seem to be several on-line services that promise to help you find and secure government grants for small business. Most appear to be less than legitimate. (Actually all of them are ... read on).

So, just what is myth and what is fact when it comes to government grants for small businesses?

To the best of my knowledge, outside of grants awarded under the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs there are no federal “grants” aimed at small businesses. The grants via SBIR/STTR programs are competitively awarded grants for small businesses to conduct R&D projects that meet a federal agency’s mission need as well as have wider commercialization potential.

Most all of the U.S. Small Business Administration’s programs aimed at small businesses are “loan”, not “grant”, programs. Most of these programs are guarantee programs which help a small business secure a loan from participating financial institutions.

The Small Business Development Center (SBDC) is 50% funded by the US SBA ... and one of their charges is to provide useful information for small business owners and to disabuse people of myths. The "free government grant" horse pucky is one of the worst scams ..... and many make money by selling books and seminars that purport to provide information on how to obtain that which does not exist.

It is like your mother always used to tell you "if it sounds to good to be true, it probably is!"

Second obvious thought is if there were "free money" available for small business, why would anyone bother with the risk of seeking, obtaining, and paying off a bank loan?

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