Beware "Free" Money

There are a variety of methods for obtaining the necessary finances to start and operate a small business. The two basic categories are outside investors and lending institutions. Both groups will require certain standards and a return flow of cash. Because of these requirements, individuals become attracted to grants. A perception exists that there are pools of “free” money waiting to be applied for, similar to scholarships and grants for education. For a significant majority of the business world, this is far from the reality.

 

Grants are primarily made available to not-for-profit organizations, such as museums, churches, research institutions, or to restore economically depressed areas. There are very limited grant opportunities for profit-based organizations. Generally, funds for this group are limited to firms that have an innovation or invention that would be a national benefit.

 

However, given these facts, it is not uncommon to see TV infomercials, newspaper ads, or to receive emails promising “free money” or “golden” home business opportunities. Just pay an “application fee” or “buy the book or list” and the money is yours. A majority of these are either scam artists or individuals providing misleading information. NBC has done an investigation on one of these misleading prospects. Additional information and links on grants can be found under Hot Topics at the Idaho Small Business Solutions website and in  our FAQ section at the Idaho SBDC website. Usually, if something sounds too good to be true, in the world of grants, it probably is. The local Better Business Bureau will often be aware of scammers and the SBDC offices have books on the different types of grants available. So always do your homework first, and, if in doubt, contact your local SBDC consultant, who can help you research the source.