The Myth About Grants for Business:
It's Not "Free Money"

Grant money is not only scarce, but the time invested in applying, performing the work required and reporting on the use of funds may be better spent elsewhere in your business.

Can an individual find a grant to help start a business? At the Small Business Development Centers, we hear this question many times a week. Unless it is for a clear purpose, the answer is no.

Many foundations offer grants to individuals for educational purposes in the form of scholarships, fellowships and funds for special studies or research. Many offer grants to non-profit organizations such as Action, Inc., the Boys and Girls Clubs, Project S.A.F.E. and so forth. Many others offer grants to educational institutions for special studies and research.

Generally, foundations do not make grants to for-profit businesses. When an individual finds a grant that assists his or her business, it is usually for a very specific purpose and not for general business operating purposes.

Foundation Grants
For information on foundations, visit: www.foundations.org or www.fdncenter.org. Both of these sites list directories of foundations and how to apply for a grant. Information about how to submit a proposal to specific foundations can be found on their individual web site. Each foundation is different and thus may have different requirements.

Government Grants
A grant from a government entity are only given for specific purposes. Go to www.missouribusiness.net/fast and for information on SBIR and STTR grants. The SBIR-Small Business Innovation Research-grants are very specific for the federal agency awarding the grant. For example, the Department of Defense awards grants to high-tech companies that will do specific research benefiting the mission of that agency. This site gives information about how to begin the application and proposal process.

Go to www.missouribusiness.net/environmental and visit the Missouri Market Development Program for information on grants to buy equipment to process recycled materials. Visit the Missouri Environmental Assistance Center for information about grants and savings available for good environmental, pollution and energy practices.

Should You Look for a Grant?
Unless there is a specific purpose for a business to seek a grant, a business owner can better put that effort into working on improvements to his or her business. Except for the SBIR/STTR and environmental programs, the Small Business Development Centers do not assist owners with finding grants.

For further information, visit the Jump Start Learning module, How can I get the government grants to start my business?

Author's note: This article was adapted from one by Nancy Staton of the Georgia SBDC.
Authored by: Barbara Cunningham, Business Specialist with University Extension, and Missouri Small Business Development Centers.
Source: Home-Based Business