Misconceptions of Grant Money
– By #MillerSD
Last week I had two entrepreneurs stop in my office and ask me about grant money for starting a new business. I thought this might be the perfect time to explain to readers some of the grant misconceptions that are floating around.
First, what is a grant? Grants are funds given by an entity – frequently a public body, charitable foundation, or a specialized grant-making institution – to an individual or another entity (usually, a non-profit organization, sometimes a business or a local government body) for a specific purpose linked to public benefit. Unlike loans, grants are not to be paid back.
Every business owner would LOVE to have a grant for starting or expanding a business. The fact is no government agency is handing out free money to start small businesses, regardless of your gender ethnicity, or economic status. The harsh reality is that 95% of most small businesses are started with personal savings, loans from friends or relatives, or commercial loans. The owner must invest their own money and collateral.
Some government grants are available for small businesses but they are designated for very specific programs such as: highly technical areas of industry, schools and training programs, other state and local government
One entrepreneur stopped in and said, “I hear On Hand Development has all kinds of money to give out.” I said, “Well I am going to stop you right there. On Hand Development does not give out grants for starting a business. We do give out grant money for new signage, awnings, and a matching fund for new employees.” On Hand has a Revolving Loan Fund that any business in Hand County can apply for. This fund started from a grant from USDA for $100,000 to help attract and keep current businesses. If you are an entrepreneur looking to start a business and need a loan, visit with me and I will get you an application.
Another BIG misconception is that grants are easy to get. Writing any grant proposal is hard work, never mind writing a successful one! It takes a lot of time and effort. If you think you can write a successful proposal the night before a closing date, you would be wrong. You need to allow yourself time to research the grant you’re applying for, read around the topic area and to plan, create and write the project down to a tee. The application requires detail; what is the project, who will be involved, how do you plan to execute it, why do you need the money, when will you start and finish, where do you plan on pitching or marketing the product? Grants are also very competitive! When thinking of applying, it is useful to remember that you are competing against hundreds, maybe even thousands of others for the money. So, if you don’t carve out enough time to do a proper job, the chances are that the application will be rejected.
So, a grant isn’t a loan that you can buy business premises with, something that you can easily apply for the night before or funding that you will receive immediately. Actually, a grant is a lot more complicated than it first seems and applying requires serious time, effort and planning for it to be successful. That’s if a grant is even right for you.
I love visiting with entrepreneurs and hearing their new ideas on keeping our community thriving. If you have a good business plan, good credit, and a good attitude, I can help you find that money for your business… but just remember it’s probably not a grant.