You’ve seen them. The advertisements on the Internet or television telling you about free government grant funds for your business. Unfortunately, there is no such thing as free money, especially not for for-profit businesses. Even so, there are some special cases where money may be available. Money awarded by a federal agency to a business is usually given to that business to further that agency’s public policy objective. For example, your business may have a product or solution that would benefit a government agency. TruTouch Technologies is such a company.
TruTouch received grant money to help develop its invention that detected blood-alcohol levels by shining infrared light on the skin. Their technology was noninvasive and only took 60 seconds to get results instead of the 20 minutes required by Breathalyzer. The funding for TruTouch came from an IRS program grant focused on “new therapies to treat chronic conditions or unmet medical needs, reducing long-term health care costs in the United States.” The initial grant funding to TruTouch was almost $250,000! The company received another $438,000 for a second grant that came from the United States Army Medical Research and Materiel Command (USAMRMC).
Grants that are for businesses are typically very specific and usually technology based. This type of grant money is usually very limited, not for individuals, not for startups, and very difficult to get! Not good news! The federal government’s primary funding website, Grants.gov says, “We have all seen them; late night infomercials, websites, and reference guides, advertising ‘millions in free money.’ Don’t believe the hype! Although there are many grants on Grants.gov, few of them are available to individuals and none of them are available for personal financial assistance.”
Even though the news isn’t good for businesses, you still might qualify for some of this R&D research grant money. If you believe you have an idea, a technology or a product that might benefit the government, then the grants for you are the U.S. government’s Small Business Innovation Research (SBIR) grant program and its Small Business Technology Transfer (SBBR) grant programs. SBIR/STTR offers grants to companies that are involved in high-tech R&D. For more information, go to SBIR.gov.
Outside of the SBIR/STTR opportunities, there are a few other sources for less technical grants through other federal agencies. You can research these sources at:
- The Catalogue of Federal Domestic Assistance (online), and
If you have given up finding money for your business opportunity through federal grants, then there may be some other resources available for you. Small businesses may have a better chance of finding grant money on the state level. The same rules apply at the state level. Grants are not given to individuals, or to new entrepreneurs to start new businesses. But money is available if you believe you can help your state with economic development activities or create jobs through new or expanding businesses. The economic development authorities in your state will list any grant money that may be available. You can find the appropriate agency for your state by going to www.ecodevdirectory.com, a professional directory of websites devoted to economic development.
One of the best resources for money to develop and/or expand your business may be the Small Business Administration – www.sba.gov. The Small Business Administration was created in 1976 to be a voice for small business in Washington. The SBA offers a large variety of programs and services to support you in maintaining and growing your business. Some of their loan best loan programs for small businesses are listed below:
1. Small Business Administration – Microloan
The Microloan Program provides small, short-term loans to small businesses and certain types of not-for-profit child-care centers. The SBA makes these funds available through specific intermediary lenders such as nonprofit community-based organizations with experience in lending as well as management and technical assistance. The maximum loan amount is $50,000, but the average microloan is about $13,000.
Microloans may be used for the following purposes:
- Working capital
- The purchase of inventory or supplies
- The purchase of furniture or fixtures
- The purchase of machinery or equipment.
Proceeds from a microloan cannot be used to pay existing debts or to purchase real estate.
2. Small Business Administration – cdc504 Loan
The SBA 504 Loan program offers small businesses another approach to business financing that promotes business growth and job creation. These loans provide long-term, fixed-rate financing that may be used to acquire fixed assets for expansion or modernization. 504 loans are made available through Certified Development Companies (CDCs), SBA’s community based partners for providing 504 Loans.
- The SBA 504 loan may provide up to $1,000,000 to be used for:
- The purchase of existing buildings;
- The purchase of land and land improvements, including grading, street improvements, utilities, parking lots and landscaping;
- The construction of new facilities or modernizing, renovating or converting existing facilities;
- The purchase of long-term machinery; or
- The refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment.
In addition to providing sources for business loans, the SBA also has information on how you can become a federal contractor. You will need to qualify as a small business to contract with the government and it helps if you are minority or woman-owned. You must register your business at www.fedbizops.gov, get an identifying number (DUNS) for financial reporting and find the business code that fits your product and services. All of the instructions for completing these requirements may be found on the SBA website.
Finally, in October 2011, the federal government created a new website devoted to small business to help them access government services. BusinessUSA is a centralized, one-stop platform to make it easier than ever for businesses to access services to help them grow and hire. BusinessUSA uses a “no wrong door” approach for small businesses and exporters by using technology to quickly connect businesses to the services and information relevant to them, regardless of where the information is located or which agency’s website, call center, or office they go to for help. As more federal agencies continue to add resources to BusinessUSA , the more it will be able to reduce the confusing array of websites that exist today. To strengthen America’s competitiveness in the global economy, businesses will need to be equipped with the best tools and information available to support innovation and job growth in the 21st century. BusinessUSA is a front door to all the government has to offer. You may find BusinessUSA at www.business.usa.gov.
Linda J. Pepper, Ph.D.
Pepper Consulting Services, LLC