With the Obama grants scam alert we sent yesterday we feel we should revisit one of our most frustrating topics, grants.
Kelly marsh and Leann Benton of the Mohave SBDC in Arizona wrote a very good straight talk explanation of the topic of grants.

The SBDCs receive numerous inquiries from the public about how to obtain a government grant. There is quite a bit of “hype” through the television, internet and even solicitation phone calls implying there is a ton of “free goverment money” available to you for just about anything you want; from starting a business to improving your home. We want you to be warned: these solicitations are very misleading, with many bordering on or being actual scams.

Just remember the old saying “If it sounds too good to be true, it probably is”. Consider this: If there is truly so much “free” money available and it is so easy to get, why wouldn’t we all be getting it?

The Truth About Government Grants

Getting grant funding to start or operate a small, for-profit, business is not as easy as many late night infommercials, emails or phone solicitors may lead you to believe. In reality, it is nearly impossible. The truth: there is grant money available from the government and private foundations. However it is not generally intended for the purpose of starting or expanding for-profit businesses.

Although there is some grant money designated for small businesses, it is usually meant for specific groups, types of organizations or certain types of activities. Most grants are targeted towards non-profits, government agencies,
educational institutions, medical research and technological advancement.

The companies that are promoting “free money” are usually making their money by selling you books or CD’s on how to find grants or lists of grants. You do not need to pay for this information. It is free to you; you just need to know where to look. In many cases, they will continue to ask for more money and some will even “guarantee” you a grant. It is impossible for them to guarantee a grant because there are no guaranteed grants. A real grant does not cost you any money to get and never needs to be paid back. What we have seen is that these companies are really selling loans. So we ask, why would you want to get a loan from an agency that has to mislead you to get your “free money” in the first place? In reality, it is very difficult to be awarded a grant and the funds must be used for specific purposes. There is also a lot of paperwork and follow up involved. You are not just handed a check and told “enjoy your free money and use it however you want”.

The SBDC will be happy to give you information on SBA loans and other financing options if you are seeking money to start or grow your business. However the only grants that we are able to provide information on are the SBIR and STTR grants that are for technology based businesses.

If you would like to search for government grants, you can visit www.grants.gov. All available government grants are listed on this website. It is the same website that you are referred to if you purchase information from an outside source. There is also a website to find information on foundation grants (privately funded) by visiting www.foundations.org. For information on the SBIR and STTR grants, please visit www.sba.gov/SBIR/.

To view articles and access information on how to recognize and avoid grant scams, both the Federal Trade Commission and the Better Business Bureau have published some information which can be accessed by using the following links: www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt134.shtm or www.arizonabbb.org/for_media/newsletter.asp?id=174.