“Free Money” Isn’t Free: Explore All Options for Business Funding, Says SCORE “Counselors to America’s Small Business”
Washington, DC—Many entrepreneurs look to the federal government each year for “free money” to start or expand a small business. The truth is, most government agencies direct their dollars toward specific projects, lenders, nonprofit organizations and educational institutions.
SCORE “Counselors to America’s Small Business” offers five tips on finding state and local funding options to help your business succeed.
Consider city, county or state assistance programs for qualified small businesses. Some examples include tax abatements, urban renewal set-asides, rural access, workforce training and economic development.
- Contact your state senator’s or representative’s office. The staff there can be helpful in pointing you toward state funds or programs for businesses.
- Take advantage of “in-kind” credits. Like cash, these can be used as matching funds. In one case, a state program counted a company’s $200,000 local property tax abatement as part of the matching requirement.
- Understand the purpose and requirements of the program. It may call for raising matching funds or creating jobs.
- Remember that having a good business plan and strong management team will help you make your case.
Don’t overlook other sources of financing that may be suitable to your small business goals, such as venture capital, equity and institutional investors. Each has its own unique risks and rewards that may or may not be suitable to your needs.
If you decide to explore federal options, the U.S. Small Business Administration (SBA) offers low-interest business loans. The SBA’s guaranteed loan programs have helped millions of small businesses get off the ground, expand, and acquire new facilities and equipment.
SCORE counselors can help you obtain these guaranteed loans and financial assistance by guiding you through the loan application process. For more information on the SBA’s loan programs, visit www.sba.gov/financing.
There are other options available, if you know where to look. Check out these resources:
- The Catalog of Federal Domestic Assistance is an ideal starting point to find non-grant assistance programs administered by federal agencies for specific types of small businesses. To access the online database, visit www.cfda.gov.
- Most universities have set up special technical centers to facilitate working with businesses on specific projects. Some federal and state technical development grant programs, such as the Small Business Technology Transfer Program (STTR), may require that you have an academic partner on your proposal. For more details, visit www.sba.gov/sbir.
- The U.S. Department of Labor Veteran’s Employment & Training Service offers employment services, transition assistance, and contracts and grants specifically for veterans. To learn more, visit www.dol.gov/vets.
- SCORE’s online Learning Center offers tips, guides and information on how to obtain a bank loan at www.score.org/learning_center.html. Download business plan and loan application templates from SCORE’s Business Toolbox at www.score.org/business_toolbox.html.
- Get real-world advice and know-how from a SCORE expert business counselor. Free and confidential advice is available face-to-face at SCORE chapters nationwide and through Ask SCORE online counseling at www.score.org.
Since 1964, SCORE “Counselors to America’s Small Business” has assisted more than 7 million aspiring entrepreneurs and small business owners through counseling and business workshops. More than 10,500 volunteer business counselors in 389 chapters serve their communities through entrepreneur education dedicated to the formation, growth and success of small businesses.
For more information about starting or operating a small business, call 1-800/634-0245 for the SCORE chapter nearest you. Or, visit SCORE on the Web at www.score.org.