Government Small Business Grants
Do government small business grants actually exist? If not, how can a small business be kept going without such a grant?
It appears that the term “grant” has been and continues to be misused. The term is loosely thrown around, and people who hear the term in connection with small business funds get the idea that money is available from the government with no repayment required. After all, that is the essence of a grant: no repayment required. To grant money is to give it, not to loan it. Yet most of the so-called grants are in reality loans, with payment terms and interest charged.
Recent news releases have announced that President Obama wants to give small business a hand. This does not mean he plans to dish out government grants to small businesses or offer any bail outs in the manner he did the large corporations. In fact, his statements have been that he wants to channel funds to “sound businesses”, meaning that small businesses will be required to prove that they have adequate resources and practices to ensure repayment. The President, Congress, and Wall Street do not yet get that the economic tsunami that was created by their policies has left most individuals and small businesses with damaged finances and damaged credit fundamentals, so there are limited small businesses in America who can qualify as “sound” businesses now. After all,even AIG, the giant of all businesses, was not and still is not sound; yet the small business owner is being held to a high level of soundness. Bottom line, there will be no government small business grants in all likelihood. So, once and for all, say goodbye to that fantasy.
In light of the lack of government small business grants, the best approach to take with regard to scraping together funds to start up a business or bolster an existing business is to save or earn at least half the amount you actually need. You might consider borrowing from friends and family, or selling assets of the business that you can operate without. Then when you have 50% of the funds you need, go to a bank and apply for a loan, showing the funds you already have as an indication of your ability to repay. Go ahead and apply for the loan, getting the best interest rate you can, and set about building your business. Once any crisis in funds is abated, then you have more time to explore venture capital or other sources of funds. The lack of grants may actually prove to be a good motivator for beefing up your marketing activities and strengthening your business. In the long run, you may benefit more from the hardship of squeezing out funds by means other than grants or loans that do not exist. This will drive you to operate a leaner and meaner small business than you had imagined you could. You will learn new and inventive ways to generate business and to stretch your profit dollars. No government small business grant will do that much for you.
Use the lean times to thoroughly analyze your business operations to detect waste and unnecessary spending, to create ways to make double productivity from the assets, equipment, and employees you have. This focus will pay of f in the years ahead, and it will be an evaluation you may begin to use periodically even in prosperous years. Borrow on your credit cards, against your assets either business or personal, or against real estate if you must to keep the business afloat, for better times will return and you will emerge with returns better and stronger. Keep your business dollars close and tight in the business accounts, take no delays on non-payers and work for flexible arrangements with suppliers and service people. As you take these measures, the likelihood is that to your surprise, things keep going and glimpses of better times ahead come into better focus. Use your time to daydream about tangential marketing strategies you might take, and new products or services you might offer at little additional cost. Both business in particular and life in general has a way of serving up some unexpected solutions just when they are most needed. So do not despair that there are not those government small business grants that you have heard about. You can make it without them.
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