“Where can I find grant money to start a business?”
Lending institutions, government agencies, business consultants and grant writers will tell you that this is one of the most frequently asked questions they hear.
When the reply is, “there is no such thing as grants for for-profit business”, some people think that you are hiding something or don’t what them to know how to access the grant money.
One day at a convention, a woman approached me to inquire about a grant to start her for-profit business. I politely warned her about the grant scams and she lightly argued. After several months, she called me and said that she recently lost thousands of dollars by joining an organization that promised her grant money. She asked if I have any suggestions to help her recover her losses because she is unable to locate the organization or any of the employees. All I could do was to direct her to filing a police report and to continue conducting inquiries.
This has happened to many people. The infomercials on late night television selling subscriptions, books and offering free seminars appear to be convincing. I have sat in many of the grant seminars to research the legitimacy of their offerings for for-profit business.
Various grant seminars that I had attended were held by privately owned organizations at some of the major hotels. Most of these organizations rarely kept business cards and brochures on-site.
The speakers were professional and the presentations were always high energy. During the presentation, they showed statistics and slides, and did a great job in convincing the audience that their organization can help obtain grants to help people start a business, or even to buy a house. They also said that their organization employs the best grant writers so as a member you will be assigned a professional grant writer who will help you obtain the untapped government money.
These organizations had one script in common, “the cost you pay for the membership package is just a fraction compared to the amount of grant money you have access to, and it’s your grant money that you never have to pay back.” Depending on the organization conducting the seminar, the membership package ranged from several hundreds to thousands of dollars, which was advertised as “a special price for today only.” At the end of the presentation many people would line up to purchase the package.
I have come across people who purchased similar membership packages, books or monthly subscriptions, went through the process of applying for a grant but never received any money. They lost their investment and some said that the organization that sold the membership package no longer exists.
Government grants are mainly for nonprofit businesses, education, rural development, renewable energy, community development, and research and development. There are substantial number of government grants listed at www.grants.gov along with the eligibility requirements and much more.
The legitimate grants for “for-profit” business that I have come across are rare. Occasionally there is an offering through a bank, community contributor, privately owned business and or organization that is interested in growing its awareness or encouraging a cause. They all often have specific requirements and the grant is usually for a small amount. These types of grants are rare.
Visit the city and state agency websites because sometimes they list local grant offerings. Their grants are mostly for the nonprofit category, community development or similar.
The closest alternative to obtaining money for for-profit business that you don’t have to pay back is through “reward-based crowdfunding.” It is not a grant. Rewards-based crowdfunding is a collective effort involving a group of people funding your venture. Even reward-based crowd funding programs have specific requirements and it requires strategy, work, time and patience to raise money.
Free money hardly exists. As its been said, “if things were that easy then we all be doing it.”
When you come across any organization that claims to be offering small or large grants for “for-profit” business, be sure to conduct adequate inquiries about its legitimacy before initiating any contact.
Raj Tumber specializes in strategic business development. He has worked with Fortune 500 companies and developed strategic business and management skills. He is also a certified business mentor with SCORE, an organization that helps small-business formation and growth. Reach him at rajtumber.com.