Bad Credit Business Financing: Why the Idea of Free Grants is Still a Problem
We’ve already written about a variety of grant scam, where business owners are conned into paying an up front fee in the hopes of receiving free money from either the government or a private organization. The problem, far from going away, has only persisted as businesses seek whatever financial assistance they can. The promise of a grant can be so welcome that they fail to stop and scrutinize the proposal being sent to them. A recent post on the SBA loans and grants forum on the subject of loan scams was submitted by a forum user who claimed that they were offered a loan, but the materials that they were given for their “application” were completely irrelevant to their business, instead probing for personal information. This type of manipulation relies on misconceptions surrounding who provides small business grants as well as what businesses are able to apply.
The perception that there is free money out there is harmful to business owners, allowing them to be fooled by scammers. In order for business owners to get a clearer image of what grants are out there, and what resources they can access free of charge, they should go to SCORE centers and other business development centers in their areas. While there may not be free money available to them, businesses can often get community support in the form of work-space, coaching and mentoring programs, and other benefits, which, while different from unrestricted working capital, can still save them a sizable amount of money in the long term. The perception that the money is out there can be dangerous because scams quickly fill in the void of legitimate material. If there were a greater awareness among business owners of what programs are actually out there and what is based on fiction, they would still be able to save money while keeping their information and finances safe.
Grants to start a business are exceedingly rare. For one thing, a government grant will usually only go to an established non-for-profit business or a business that is engaging in medical or other types of research. There are private grants that can go to for-profit businesses, usually those that fall within a certain demographic with involvement with the grant issuing organization, and these programs can be great for those who get them. That said, the competition for all types of grants is steep, and business owners should not pin their financial hopes on getting a grant, it is just not a realistic strategy.
Photo Credit to Peter Shanks on Flickr