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Is there really FREE money to open a business?

by CeceliaT, Community Moderator

  • Created: October 5, 2011, 10:57 am
  • Updated: October 6, 2011, 11:56 am
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8 comments

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

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.
Tags: Community Blogs, Small Business Cents

Comments

businessownerusa | Window Shopper | 5/3/2012 - 1:42 pm

Free money myths have been around form the beginning of time. While it's true
that historically there have been cases when government grants helped small
businesses achieve certain success, the vast majority OF TODAY'S ADS ARE
NOTING MORE THAN SCAM. The basic rule of thumb is to use common logic, and if
it is too good to be true, then don't even bother researching and falling for
it.

Protect yourself and your business from free money scams.
Professional Web Site: Business Insurance

thegatekeeper | Window Shopper | 1/4/2012 - 12:29 pm

A very good blog with useful information, thanks mate. Muay Thai | Muay Thai Kick | How to Muay Thai

sevak1981 | Window Shopper | 5/3/2012 - 1:40 pm

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.
Professional Web Site: http://www.universallinesins.com

PositronicDesign | Window Shopper | 12/18/2011 - 5:49 pm

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.
Professional Web Site: www.PositronicDesign.com

gianez | Window Shopper | 12/6/2011 - 11:21 am

This post has been removed from public view (Spam). Please review the Community Rules of Conduct for more information.

Jerry Chau | Window Shopper | 10/12/2011 - 4:35 pm

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_...

seowhite123 | Window Shopper | 10/11/2011 - 2:17 pm

Appreciate this short article, that I'll refer the numerous clients that call me for "the free government money". A few of the folks I speak with don't believe me that there's no free money.best dehumidifier

HawaiiVal | Window Shopper | 10/8/2011 - 5:16 pm

Thank you for this article, to which I will refer the many clients that call me for "the free government money". Some of the folks I talk to do not believe me that there is no free money. I am sorry that the ads and private scammers who operate so widely are not arrested or stopped from their thievery of uninformed small owners who are struggling to operate a business. I wish SBA would run PSAs! Promote their services, inform the public about the real role government can play in helping Americans start and run a business.

Calco | Performer | 10/6/2011 - 2:11 pm

Just remember, nothing in life is FREE. If 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.
Professional Web Site: http://calcocommercialinsurance.com