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Free Financing For Small Businesses? Not Quite

Nothing good in life comes easy, and that includes getting financing for your small business.

Despite advertisements to the contrary, no federal government agency—including the Small Business Administration—offers grants to start or expand small businesses.  Most foundations, corporations and private institutions that sponsor grant programs follow the same policy, except in cases where the business involves development of a new technology, or is a nonprofit organization.

The SBA does administer several loan programs in partnership with local lenders, community development organizations, and micro-lending institutions (agencies that specialize in limited, short-term financing).  SBA backs those commercial loans with a guaranty against non-payment that eliminates some of the partner’s risk.  Complete details on these programs and their application requirements are available under the Services section of www.sba.gov.

Depending on where you live, your small business may be eligible for assistance from state and local economic development agencies.  Most often, the assistance takes the form of workspace, training, and administrative support for start-ups; reduced rates on existing office or production space; and tax incentives.  Others sponsor micro-loan programs for specific business types such as childcare and firms that locate in or support designated enterprise zones.

Established small businesses can apply for federal grants to carry out various publicly mandated services or programs.  As with the SBA loan program, they must be operated for profit, have a place of business in the U.S., significantly contribute to the economy, and meet size standards for its industry  More information is available at grants.gov, a central storehouse of information on over 1,000 grant programs from 26 federal agencies.

To learn more about financing your small business, contact SCORE Rochester.  Seasoned, volunteer business counselors stand ready to provide free, confidential business counseling to small business owners.  Call (585) 263-6473 or visit www.scorerochester.org.