Is there really FREE money to open a business?

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.