Whenever new entrepreneurs start researching the opportunities to make their fortune, they run up against the reality of financing that dream. And depending on how big their plans are they may need a lot of money. If they don't have the personal wealth to make that happen, they must begin the search for financial backing. This research often turns to the Internet (or infomercials, business magazines, newspapers, etc.) in search of funding. There these prospective business owners will see many ads for "Free Money!" and "Grants that You Never Pay Back" that look like the answers they need. But if you are thinking this is how to get free money for business start up costs, then you might be in for a shock.
The Big Myth
The ads that promise all of this free money are actually tricks to get people to pay for seminars, lists, books, or electronic downloads of widely available government data regarding legitimate government and private grants. The cold, hard truth is that the federal government and most private institutions are not in the business of giving out money to entrepreneurs for business start-ups. Of course, common sense and a basic awareness of business principles should tell you that no one (besides maybe your family) will give you no-strings-attached money to start a for-profit business. Unfortunately this myth is perpetuated by the people that would take advantage of those looking to better their lives through business ownership.
The Truth of the Matter
There are government grants given to many non-profit organizations like schools and Universities, libraries, and state and local governments. And yes, there are even a few small, highly specific for-profit grants given to those that will, for instance, locate their business in a low-income area and guarantee jobs to people in an underemployed community. But these come with many restrictions and stipulations. There is no free money to help the individual entrepreneur with his or her business start-up.
If you insist on looking into it, please do not pay for any of these products discussed above. They are all repackaged data from the Catalog of Federal Domestic Assistance (CFDA) and Grants.gov. Check out these sources for accurate data on legitimate grants to organizations. In fact the US Small Business Association does not give grants either, but they do have a host of available loan programs for entrepreneurs.
So what do you do if you need the money and can't get it for free? Well, you must do what entrepreneurs have done for years and years: find the sources of business start-up money through loans or equity investment in their company. Many banks, savings and loans, and commercial finance companies will loan money to entrepreneurs with good business plans and some amount of their own investment in their enterprise. And private investors will do the same if they foresee a decent return on their investment.
A Legitimate Alternative
Another alternative to financing your new business venture is to start with a low-cost entry that doesn't require loans or other risky investment. A home-based business powered by the Internet can be a true source of significant income if you find the right fit for your skill set. Although there are numerous online swindlers as well as excessive hype and misinformation on the World Wide Web, there are also legitimate businesses with good products, business models, and training that can be the answer to your entrepreneurial needs.
Just do your research and talk to others involved in these companies. Investigate them closely and choose the one that you feel comfortable representing. Only then will you be able to find the financial success you are looking for and realize your dreams of business ownership.
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