Starting a small business can be challenging, especially when funding is an issue. Although the economy has started to improve, lenders are still cautious when it comes to lending money. Obtaining funding for Start-up businesses, which are defined as less than 24 months of operations, can be especially tricky.
One of the most common inquiries received through the Small Business Development Center (SBDC) is regarding business grants. Clients are often disappointed to learn that small business start-up grants are a bit of a myth, with a few exceptions. The Mat-Su Health Foundation has a grant program in place for local non-profit business offering services to significant health related problems impacting the citizens of the Mat-Su Borough. Some of the Alaskan native corporations offer start-up grants to their members. The National Association of Self Employment (NASE) also offers a grant program to their members. And, www.grants.gov is another trusted resource that may offer grant-seekers some information on possible grant opportunities.
Another common myth is that the government has grant money available to women-owned businesses. Back in the 80’s, the Small Business Administration (SBA) realized that the majority of small businesses in the US were primarily owned by males. So, the SBA offered an incentive program to encourage women to become business owners. The program was a great success which resulted in a nearly even split of men to women who currently own small businesses. Today, both women-owned and minority-owned businesses can qualify for preferential treatment when it comes to government contracting.
Generally, the industries that are more likely to obtain grants include public health services, educational services, green business solution and renewable energy solutions. Usually grants are awarded to non-profit agencies rather than for-profit businesses.
Business owners should tread cautiously when surfing the internet for business grant information. And, entrepreneurs should be especially leery of any grant opportunities that require a financial commitment up front as there are plenty of scams out there. Remember to follow the tried and true advice of our elders – if it sounds too good to be true, it probably is.
Julie Nolen, Alaska Small Business Development Center Assistant State Director