Small business grants

Grants are available to educational institutions, 501(c)(3) corporations, and local governments.

Grants are a wonderful source for funding: you don’t have to pay the money back. Any business would take free money, but businesses are very unlikely to receive a grant. The very first statement on the SBA Grant Fact page is that “SBA does NOT provide grants for starting and expanding a business.”

It seems like every day I field a question on where to get a grant to start or expand a business. In my role as a Product Center innovation counselor, it is my job to assist entrepreneurs to start or expand their business. Most small business entrepreneurs contacting me believe that they can receive a grant for their business. I explain that there are no grants for business, and the client typically will not believe me. I explain that the entrepreneur will need a written business plan to make an application for a bank loan or other traditional financing. But, the entrepreneur will spend countless hours online doing searches for grants, then I will be contacted about such-and-such outfit that will write a grant on behalf of the small business: “What is your opinion on [such-and-such firm] to get me a small business grant?”

I tell the entrepreneur that they will have better luck getting struck by lightning than being awarded a grant for their business. But, the typical entrepreneur will persist in seeking out grant funding for their business. After a few weeks time, and many times after paying somebody or some firm to write the grant, the entrepreneur finally comes to the realization that there are no grants for small businesses. With despair, the entrepreneur contacts me again to help them write a business plan so they can obtain traditional financing for their business. I gladly assist them.

Grants are typically financed by the government, and the government is financed by taxpayers. Grants are very judiciously awarded and mostly for some project that has much public good. If you are seeking a small business grant, you are better off writing a business plan and asking your local bank for loan.

I am a Michigan State University Extension educator from L’Anse, Michigan. You can obtain free business counseling by registering with the MSU Product Center

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