What are your chances of actually getting a grant or money to start a business or to pay for bills or debts ? This page will give you some idea of the process involved to get a grant , who grants are given to , and your chance of actually obtaining a grant .
(under construction)
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These statistics are not meant to discourage you , but to show you that grants very rarely are a quick fix out of a desparate situation. If you need money NOW , this way of trying to get money will most likely just delay your getting real help . Small businesses can work out , but planning , market research , willing to invest time and money ( having a nest egg to see you through until your business starts making money) , and lots and lots of hard work and sweat , are the realities of small business owners.
What are the most popular ways to get money to start your own business?
Reality: The small business association is not one of the places. The S.B.A. does not give out money to individuals, but they give it to non-profits that help individuals start a business.
The places where people get money? Here are the top five:
(1) Family and friends.
(2) Bank Loans.
(3) SBA loans (not grants you have to pay these back!).
(4) Venture capital (this is where rich corporate investors help you and expect to get a cut of the profit back).
(5) Angel funding (individual investors or groups of investors get together to help businesses get started. You need LOTS of preparation to get money from angel funding,)
Reality: You need to have money to start up a small business and there is very little chance that you will get it from a grant. Fifty percent of small businesses start up in debt by using credit cards to start up. Only 6% of small businesses get a SBA loan, and these are well documented businesses with a good chance of making it as a business. Only 2% of small businesses get venture capital loans and these are also only well documented and guaranteed to make profit businesses. Most of the people who get these loans will get them for research purposes , not to actually start a business.
More facts about grants and other funding :
- * You will be competing with thousands of other people
- You usually have to provide a personal financial promise into the "pot" like mortgaging your house , or some property you own - In other words , you can really put your whole life on the line for a business that might not work .
- Most business lose money for the first couple of years , so you will need money to live on in the meantime.
- You will be responsible in raising 10-30% of the finances from your own sources (e.g. savings, loans from relatives , putting your house or property into collateral).
- You will have to keep immaculate records on your use of the money, or follow particular rules that the loaner will stipulate.
- You can't use part of the money for personal bills like utilities , groceries , car payments etc.
- If you don't make it , you will end up more in debt and further down the "hole" that will take even more "climbing " to get out of.
One thing that you should NEVER NEVER DO : Pay anyone to help you get a grant ! ! !
Types of grant sources and information about what they are :
tp://en.wikipedia.org/wiki/Angel_money
http://findarticles.com/p/articles/mi_m1510/is_n68/ai_8897908/
http://www.allbusiness.com/business-finance/equity-funding-private-equity/918-1.html
http://www.nvca.org/
http://www.startupjunkies.org/vc.html
- Raising Money from Friends and Family
http://smallbusiness.findlaw.com/starting-business/starting-business-financing/money-from-family-and-friends.html
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References used for this page can be found on the following sites :
http://staff.lib.msu.edu/harris23/grants/2biz.htm
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