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Business Grants

How do I get a grant to start my business?

In short, the bad news is, in the 15 years I've been with the SBDC Network, I have never found a legitimate grant for a business startup.  There is an occasional contest like Zions Bank offers annually for women owned businesses as part of their promotion plan but, it’s not an ongoing free cash program.

Two Legitimate Grants

The Small Business Innovation and Research Grant (SBIR)
The SBIR is a program the government uses to get private industry to research something for them. If they need a new laser guided bomb sight, they send out a Request for Proposal. If your business has a long standing track record of producing that kind of technology you send them a proposal in competition with thousands of other firms. If you win, they give you some money to do the research.

The Value Added Producer Grant (VAPG)
The Department of Agriculture provides a competitive matching grant for existing Ag producers. If you produce a product (let's say berries) and you want to add value to it prior to selling it (let's say make jam) and you are willing to put up half the cost of the new venture in cash (say you have $100,000 sitting around you don’t know what to do with) and you are chosen out of a national competition of thousands of other farmers for just a few awards nationwide, then the department of agriculture will match the cash you put into the business expansion up to a point.

Myth, Legend and Scam

Anything you hear about cash grants for businesses is immediately suspicious.  I have followed up on leads for what seems like hundreds of possible grants. I have never found one.  Everything I have seen is just misinformation or flat out lies and scams. It’s believable because common sense would make us think that there should be something to help someone like disabled veterans but, I haven’t found anything.

Recently, I talked to a guy who had been selected to receive a $40,000 grant and enclosed was a check for $4,000. All he had to do was wire the company a $3,850 grant processing fee via Western Union and they would send him the rest of his money. He could even use the money from the check they just sent him to do it with. I advised him not to. He did anyway. The check had a “Stop Payment” order on it.  The bank wanted their $4,000 back. Of course, the "grantor" is gone and the address on the paper work is for Montessori Grammar School in Ogden, UT.

Matthew Lesko made millions with “Buy my book and I will tell you about federal grants available to help you start your business.”  The federal government (U.S. Small Business Administration) gives Utah State University a “grant” for half of my salary. USU pays everything else. I’m here to help you start a business through training and counseling. So, there you go! A federal grant that helps you start a business…by paying my salary to teach you how to write a business plan. They make it sound like free cash but it never is.

“90-day money back guarantee.”  That’s the hook to get your money for information. The institutions listed in the packet you will receive are like The Kellogg’s or The Kaufman Foundations which give grants to places like Utah Schools for the Blind but would reject a business start-up or expansion request. Since they only meet every 6 months or so, the victim can’t get turned down and get the rejection letters back to the scammer in 90-days so they lose their money.

Now you know the truth about Grants for Business.

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