A Message on Grants

You may have heard that there is free money out there to be given away to small business owners. This is not necessarily true—most small business owners obtain financing through loans and their own personal funds.

The difference between a grant and a loan:

A grant is essentially “free money” that does not have to be paid back. A loan is “borrowed” money that will need to be repaid, often with interest. The government’s grant program is very limited and described more below. The government’s loan program is through the Small Business Administration (SBA). SBA loans are guarantee loans made through local lenders. For more information on SBA loans see our other publications.

While grants provide money that does not have to be repaid, they often require the recipient to provide matching funds. For example, you may need to come up with $10, 000 before the grantor will give an additional $10, 000.

Are there any grants out there for your business?

Grants all have different requirements for eligibility. However, the majority of grants are given by foundations to groups of people who are looking for money to support a good cause. Examples may be:

• Scientific or medical research
• Community programs
• Educational programs
• Environmental programs

The Small Business Innovative Research Program is the government’s grant program. It focuses on research and development for the commercial sector. For more information contact the Industrial Research Liaison Program through Indiana University at 855-6294, or look over the following website:
http://www.zyn.com/sbir.

Most grants do not fund the usual retail, service, or manufacturing business idea. This is not to say that there is not something out there that will fit your needs. However, it is the responsibility of the business owner to do the research.

The Business Plan

For any grant or loan, you will need to write a business plan or proposal. Any lender or grantor will want to know the reasons why they should give or lend you money. The Small Business Development Center has free counseling services to give guidance in writing a business plan. Please contact us @ 812.425.7232 or dalbin@ccswin.com.