Thursday, January 22, 2009

Free Money for Small Business

You can have all the free money for small business you want. You have been dying to find out how right? Well I am about to tell you the secret. This will change your life forever!

You have heard all this before right? Just send $29.95 and we will tell you how to get all the secret grant money the state and federal government hands out like candy at a parade. Well the truth is that there is no such secret grant or loan program. Sorry to burst your bubble. This is one of the biggest scams perpetrated online targeting small businesses. Free money for small business sounds great though and people continue to send the scammers their hard earned cash.

There are special programs from the state and federal governments to secure money for your business; however, it is rarely a free gift. It is usually earmarked as government backed loans. Local lending institutions will actually write the loans and the government will guarantee them. This makes the loans much easier to get since the banks know that no matter what, they are guaranteed to get their money back. They will also issue grant money for businesses in areas they have deemed to need economic stimulus. Say an inner-city neighborhood has been declining for years and the local government wants to revitalize the area. They can apply for federal and state grants to issue to businesses willing to locate there or stay put if they are there and thinking of leaving. It also works for rural areas where small towns are starting to die. They may receive money to give to local businesses to help stabilize the area. Along with grant money, local governments also will sometimes give tax credits to businesses to locate in their areas. This is, in a way, free money for small business.

Also, there may be an alternative to receiving free money from the government. Try friends and family members. There is usually someone close to you that may have some extra cash burning a hole in their wallet. With today’s low interest rates they may be willing to take a chance on your business. It can be set up as a loan or you may be able to trade some equity for the cash infusion. If you’re willing to take on a partner then it would be ideal for you to accept the money. However, remember they will now have a say in the operations and it could put a strain on the relationship. Remember, there are a lot of friendships that end over money situations. The same goes for family members that may invest with you. They may not understand if the business goes under, even if it has nothing to do with your management. Christmas dinner may be awkward when grandpa asks you to “pass the potatoes please”, and cousin Larry pipes in with “would you also pass the $30,000 that I gave you last fall while you’re at it’.

Another great place for some almost free money for your small business is the Catalog of Federal Domestic Assistance. It is available for free and contains the grant money distributed by the government. Now it may sound easy right? “Here is what I was looking for”, but you have to realize that to receive some of these grants every thing has to be in perfect order. You may have to be of a certain race, have one arm, live in a specific neighborhood, graduated 78th out of a class of 211, and submit the paperwork on a Tuesday at 3:17pm. So it is possible. Okay, I take it back, there is such a thing as free money for your small business.