Paulsell, Assistant State Director of the Missouri Small Business Development
Centers at the University of Missouri, hears this question at least twice a
you have any grants to start a small business?”
Grants are usually made by government
agencies or non-profit foundations. Very seldom are they intended to fund
for-profit enterprises like a small business. The grants that are available for
small companies tend to be focused on very specific purposes, such as providing
childcare or working with disadvantaged children. Grants of that type may not be
used for general business operating purposes.
“A great deal of
misinformation exists in the marketplace regarding the availability of money to
start companies or expand existing firms,” says Paulsell.
“The reality is that in spite of
what the television infomercials claim, the majority of capital available to the
small business sector comes through loans. Some of those can be negotiated at a
reasonable rate, and some require a guarantee. But ‘free money’ for small
businesses is virtually non-existent.”
The few grants available to small
businesses from government agencies are specifically designed to help the agency
meet its goals. For instance, the Small Business Innovation Research (SBIR)
program does make grants to high-technology companies to conduct individualized
research that will benefit the agency. A grant proposal is necessary, and the
program is highly competitive. Only a few companies may actually qualify for
this type of assistance.
“Unfortunately, there are some
individuals and companies who take advantage of small business owners by selling
them books and directories supposedly listing a myriad of grant programs for
entrepreneurs,” Paulsell says. “For $30 or $40, business owners are promised
a comprehensive list of sources for ‘free money.’ Our counselors often have
to spend a great deal of time convincing folks that the claims are untrue.
“We can’t offer you free money,
but we can offer you technical assistance, counseling and other educational
resources without a fee. We can help you prepare to access capital through other
avenues. You will need to prepare a business plan and demonstrate that you have
a good understanding of finances and the other factors affecting your company.
But we can work with you on that, and in the end, you will have a healthier
There are many conventional business
loans available as well as special loan programs through the U. S. Small
Business Administration. SBDC counselors can assist in preparing applications
and other documentation to apply for those loans.
For more information, contact your
local SBDC or University Outreach and Extension office at 660-785-4307.
Don’t fall prey to the advertising
that promises you something for virtually nothing. Save your money, and invest
it wisely in your growing business!