Entrepreneurs Getting Free Government Grants To Start Businesses: What Is The Truth?

It can be incredibly stressful starting your own business; particularly if your budget is running low as you prepare to launch. The last thing you want is information that raises your hopes, only to have them dashed when you discover that this information was inaccurate.

There are many young entrepreneurs who are under the impression that they can get money from the government to start their business. This is a misconception; no one (except maybe your parents) will give you money with no strings attached, so don’t be fooled by anyone who promises this. There are plenty of people out there who will tell you that you can do this, but be warned: you are starting a business to make money, not pay it off to these unscrupulous operators.

If you are an entrepreneur trying to get your business off the ground and hoping the government will help you finance your venture, you need to know the facts:

1 – Small non-profit businesses are rarely able to get government funding; these funds are generally reserved for non-profit organizations and other businesses that provide employment in economically disadvantaged areas.

2 – Companies that are engaged in research and development of new technologies can often obtain financing. However, if you are opening a laundromat, you will not get a government grant to do so. These funds are typically reserved for the best and brightest in the fields of science and engineering: research projects can receive grants of up to $100,000 and an additional $1 million for production.

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3 – Even companies that are qualified to receive these grants cannot obtain them simply by asking for them at any time. There are specific application processes for these grants that are time sensitive. If you miss the application deadline, you may have to wait until next year or until a call for applications is announced.

4 – There is some hope of receiving government funding, but keep in mind that not all of this money is in the form of grants. There are small business loans that can be a traditional interest-bearing loan or matching grants with 25% of the cost awarded; the other 75% must be collected by your company. You will generally need to submit detailed reports of your business operations for tracking purposes when you receive these grants.

There are business grants at the local, state, and federal levels – a good business plan can help your business get one of these loans. Your business plan should include a detailed description of how you will produce your product; provide your service and how you will market your business, among other things.

Your business plan will also give you a clearer picture of the viability of your business. After reviewing it, you can decide if your plan needs a refresh, or if it’s time to go back to the drawing board altogether. This can save you a lot of time when starting your business.

With the right information, your business will have a much better chance of getting financed and of course being successful overall.