Small Business Grants — Too Good To Be True?

by Ed Martin on October 17, 2009

I hear all the time that there are millions and billions of dollars in grants for small businesses just sitting out there waiting for someone to come and apply for them. Is it true, or too good to be true?

Uncle Sam
The first place to look is the US federal government from and, as well as the SBA.  These sites provide lots of information about grants, but they all say unfortunately that Uncle Sam does not provide grants to start or expand a business. Grants are only available to non-commercial organizations, such as non-profits and educational institutions in areas such as, medicine, education, scientific research and technology development. Moving on.

State and Local

Next place to look is with state governments. Some states do provide grants for certain types of businesses such as child care centers, creating energy efficient technology, and developing marketing campaigns for tourism. The catch here is that these grants are not necessarily free money. They usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. If you are in one of these businesses take a look at  The same goes for local and non-profits.

If you are not one of these specialized business, both federal and state government agencies provide financial assistance programs that helps small business owners obtain low-interest loans and venture capital financing from commercial lenders.

The Minority Business Development Agency  is often cited as a grant source. Their website says that grants available are limited and generally for research projects, biotech or high tech.

Real or Hype?

There is grant money for small business out there, but it isn’t simple to get. It takes a lot of time and effort to do a search and find grant opportunities, and then to complete the application. Is it worth that investment or can you better spend your time and money? If you don’t want to do all the work yourself, you can hire someone to help, but that too can take time and money. All of this time looking and applying and then receiving a grant isn’t helpful if you are looking for funding now.

I spent some time looking for small business grants and never found any to apply for. That doesn’t mean that they aren’t out there and you won’t find one you can qualify for. I’m just saying don’t fall for the hype that grant money is falling from the sky. Be careful and wary of anyone who tells you that it is. The whole grant getting process will take time, effort and money you could be spending on growing your business. You decide which is the better investment.


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