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Is there really FREE money to open a business?

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Is there really FREE money to open a business?

By CeceliaT, SBA Official
Published: October 5, 2011 Updated: October 6, 2011

By Cecelia Taylor

Uncovering the truth behind  the free money myth

It is not uncommon for potential business owners to call or visit the SBA asking for grants or free money to start their businesses. In many cases, you have likely read or heard the “free money myth” and how trouble-free it is to get your share, either from a late night infomercial or from an obscure publication.  In most cases, the information is incorrect and misleading. In other cases, it’s close to a scam, so be leery of anyone who asks for money up front to get additional information that leads to free money.  

SBA and most other funding organizations across the nation do not provide grants or "free money" for starting or developing a small business.  Although there are certain types of grants available, these are generally specialized grants targeted towards specific groups, organizations, or activities.

The grants that SBA does provide are generally awarded to existing organizations to provide specific technical assistance to small business owners.  These grants may be targeted to nonprofits or educational institutions.  For example, SBA has funded grants and contracts to help small businesses develop and maintain a drug-free workplace.  These awards went to nonprofit organizations and SBA Small Business Development Centers (SBDCs) who demonstrated the ability to assist in this effort. SBA also facilitates the SBIR program, in which federal agencies award research and development grants to high-technology small businesses.

So in short -- the federal government does not give grants for starting or expanding small businesses.  But on the flip side, the government does provide free help in planning how to start or improve your business, and in securing low-interest SBA-backed small business loans. Some states do offer small business grants to individuals. You should check with the local economic development agency in your state to see if grants are provided.

So what can I get for free?

There is plenty. Each of these freebies will go a long way in helping to get your business off the ground.  SBA offers an abundance of:

-Free small business advice

-Free help with writing your business plan, and

-Free access to online business training and courses

The SBA serves small business owners across the country through its various programs and services, designed especially for small businesses.  SBA has district offices in every state and territory, as well as a network of resource partners (like SCORE and SBDCs) to help business owners access SBA’s programs and services, including loan guarantees, federal contracting opportunities, training, counseling and more.

In addition, SBA’s online small business training offers more than 30 free training courses, workshops, electronic tools, podcasts and video content to assists business owners and entrepreneurs.

About the Author:

Cecelia Taylor

SBA Official

CeceliaT is a moderator for the SBA Community. We appreciate your participation and feedback on how we can continually improve the community to meet your small business needs.

Comments:

I am excited to find this website and hopes that it will be an success
Thanks, weary well written article
Thanks.
I went to free grants dot com and they told me I could get up to $500,000.00 in a free grant to start my new business. They told me that I needed to get estimates for everything I would need to open the business. After all my effort in doing this I called them back and was ready to submit all the information I had gathered. Then they told me all I would need was a $199.00 processing fee to get the ball rolling. I now have a sick feeling that something is rotten in Denmark. Am I about to be taken? Is this a legit web site or just another scam?
Regardless of the "free money" incentive it shouldn't entice you to open up a business. Your business plan should be reason enough to open it
Thank you Ms. Taylor for "blowing the lid off" these hoaxes. As a "Start-up Business Survival Guide" I can honestly tell you that many budding entrepreneurs get so discouraged when they discover the truth about these FREE MONEY GRANT SCAMS.
Regardless of the "free money" incentive it shouldn't entice you to open up a business. Your business plan should be reason enough to open it. If you have the passion and the planning set then you won't need any free money as you will likely be making plenty in a short time.
When you are starting a business you should have a detailed business plan. Don't let your emotions stand in the way of your success. The impulsive buying period is over for consumers. If you have a cool idea, such as selling a cute teddy bear online, you should think hard before launching that product. Your online sale won't most likely won't exceed satisfactory levels. You will need to submit your products to several large retailers and sell through them for any reasonable results. Our business insurance clients are in two categories. Those who don't exceed $60,000 in annual sales and those who are $250,000 and above.
I've always had to correct people who repeat the "there's free money out there myth". Trust me, if there was, I'd have gotten some. I wish it were true, but it's not. Good article that I can send people to. Thanks.
Grant Scams Abound -- But There Are Billions Available From The Federal Government for Technical Research and Development Check it out: http://www.huffingtonpost.com/jerry-chautin/grant-scams-abound----but_b_564954.html

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