In spite of what people see on television or hear from friends, the fact is there is no government agency or private foundation handing out free money to start small businesses, regardless of the money seeker’s gender, ethnicity, or economic status. Everyday our office gets calls from people convinced there’s ‘free money’ out there to fund business start ups.
The fact is that most grants are awarded to non profit organizations. A few go to businesses that do research and development geared toward crucial government projects. These grants are extremely specific in nature and often quite technical. For example, there is a tiny grain of truth in those late night TV infornercials. There is a program called ‘Small Business Innovative Research’ which does award grants of up to $100,000 to research ideas that seem promising, and then to develop products if the research is successful. However, most of these grants are for projects such as how to put a satellite into orbit and then repair it. These funds are not available to people who are interested in opening restaurants, hair salons, and other more common small businesses. If the government provided free money to everyone who wants to start a small business, it wouldn’t last long. And can you imagine the outcry from taxpayers if their money was funding these risky ventures?
The fact is that most new businesses are started with personal savings, loans from friends or relatives, or small commercial or personal loans. Perhaps one reason this ‘free money’ myth is so prevalent is that people are looking for an alternative to the work and detail required to get a conventional loan. The idea of writing a business plan and approaching a lender can be intimidating. But think about it aren’t you more likely to succeed if you do the groundwork and research required? There’s a reason procedures are in place for small business loans. One of the most important factors in obtaining a loan for a new business is the borrower’s personal credit history. Lenders don’t care if you are male, female, black, white, Asian, Hispanic, young or old. The bottom line is: Can you pay the money back?
The Memphis Chapter of SCORE (the Service Corps of Retired Executives) provides training and counseling for individuals who want to start their own businesses.
For further information on grants, visit the following websites: