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What you did not know about small business grants

August 29th, 2013

Is the government really giving away money to people to start and expand a business? The answer is a mixed yes and no. The grants offered by the federal government are not exactly aimed at people who want to start a business, they are for non-profits, educations institutions and non-commercial organizations.

Yes, you could get a business grant through local programs and non-profits. Most of them are for businesses that imply generating efficient technology, encourage tourism or education. What you also need to know is that most of the time you are offered a small loan. This is still a good type of help because with your startup you would probably not get any type of funding at this point and the loan is offered under better conditions than a bank would offer it. The government might even offer venture capital financing programs to help you grow your business. That means that you will get the money that you need, but they will take some equity in your business.

The number of grants offered by the government and even by other institution is limited and the conditions are strict. If you really want to learn how to get a small business grant from the government you can check the official business portal at business.gov.

Don`t fall into any trap. Even institutions or other major companies that offer small business grants will not just give away money without getting something in return. They will want some part in your business, some benefits, equity or they will hope to get a contract with you or buy your future business when you make it big. But the good news is that it is not a bad thing. Even if you don`t plan to use a grant to start your business you would still need at some point in time to find a venture capital company or an angel investor to help you grow. And getting an investment from a VC is no child`s play, you really have to be prepared and prove that your company is generating some revenue.

So what is there to do? Study the conditions of all small business grants and pay attention to how and when you will need to repay the loan. Once you know everything there is to know go ahead and apply. Every financial help is gold when you are starting a business.

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