Friday, December 13, 2013

The Truth Behind Government Grants for Small Businesses

Financing has always been a big concern for small businesses and many entrepreneurs look for financing in the form of grants. However, there are strict guidelines for government grant eligibility. For instance, eligibility depends on what kind of business you’re in and the benefits that the government and taxpayers may receive from investing in your business. This article by the SBA lists some key information that entrepreneurs should know about government grants. Some of that information is included below. For the full article click on the following link:

Federal and state governments do not provide grants to: start a business, pay off debt, or cover operational expenses. However, federal grants are generally aimed at specific industries and causes that are identified by the government which include scientific and medical research, conservation efforts, and so on.

State business grants are available, but are closely tied to the agency’s agenda, for example to advance regional economies and promote causes such as clean energy development. State grants are also geared towards larger businesses and may also require that the grant be matched or combined with other forms of financing such as a loan.

If your small business is engaged in scientific research and development (R&D) then you may qualify for a federal grant under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. These programs encourage small businesses to undertake R&D projects that: meet federal R&D objectives and have high potential for commercialization.

According to the SBA, the bottom line is that if you are looking for free money then you won’t get it from the government. You won’t have much luck securing this type of funding unless you fill a specialty area. So if you are looking to start or grow your business, you should consider exploring other funding options such as loans or crowdfunding. 

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