Small Business Grants: Fact or Fiction Written by Lynn Wilson March 14, 2008 A couple weeks ago I received a call from my brother-in-law asking me to help him find and write a small business grant. It’s a request we receive often at the Innovation Center. I proceeded to tell him that small business grants are basically a myth. There is no government agency waiting to hand out money for people to start excavating businesses, restaurants, or any other type of for-profit businesses. I could sense his frustration but couldn’t tell if he thought it was me or him that was misinformed. Unfortunately this is the same frustration many of our clients feel when given this response. We’ve all seen the infomercials with the guy in the funny suit begging us to buy his books that tell you how you can obtain free money to start a business. In fact, there are many advertisers that want you to believe there is a pool of money just waiting to be grabbed up by inspiring entrepreneurs. The truth is most grants are awarded to non-profit organizations. Very seldom are they awarded to fund for-profit enterprises like small businesses. The harsh reality is that most small businesses are started with personal savings or loans from family, friends, or commercial loans. Even the SBA does not give grants to start a small business. I recently ran across an article about a woman who started a small business with grants funds. The difference; what she actually started was a non-profit organization. Grants that are available in the small business sense are those that address societal problems such as the one mentioned in the article. Here is a link to the article http://www.successinstyle.org/familycircle.pdf . There are some grants available to assist high-technology companies. For instance, the Small Business Innovation Research (SBIR) program does award grants to companies for the research and development of products that have the potential for commercialization. Even these grants are limited to cutting-edge research that addresses critical scientific and engineering needs in fields ranging from agriculture to manufacturing. To learn more about the SBIR program click on this link http://grants.nih.gov/grants/funding/sbirsttr_programs.htm. If you feel that you qualify for this type of grant assistance the Innovation Center will be happy to assist you with preparing the grant application. In addition to specialized grants there are incentive programs available to some small businesses through state and local city governments. Oklahoma for example has the Oklahoma Quality Jobs Program that allows qualifying establishments creating new quality jobs to receive an incentive to locate or expand in Oklahoma. Administered by the Oklahoma Department of Commerce, the program provides quarterly cash payments of up to 5 percent of new taxable payroll directly to a qualifying company, for up to ten years. To qualify, a company must be a central administrative office, manufacturer, research and development or a listed service company with 75 percent of total sales to out-of-state customers. To learn more about the Quality Jobs Program visit http://www.okcommerce.gov and click on the Business Incentives link. Local cities may also provide incentives to small businesses that locate in their respective communities or industrial parks. To learn if your community provides such incentives contact your local economic development authority. You can find information about grants at your local library and on the Internet for free. The federal grants web site is www.grants.gov. Every funding source has eligibility requirements you must meet to apply as well as activities you must perform in the event you do receive a grant. In addition to assisting with SBIR grant applications, the Innovation Center has access to demographic and economic data that may be useful when preparing a grant proposal. The old cliché holds true; if it sounds too good to be true, it probably is. Don’t be scammed into buying books or paying for services claiming to find and write small business grants for you. If you want to start a small business you will most likely need to rely on traditional funding sources. Next month our feature article will explain how to plan and prepare for financing your small business and help you identify various sources of commercial funding.
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