Funding for new Shop

[Powersolo]

I haven''t gotten to the funding phase yet but I''m trying to get some ideas. One way was to apply for a government grant. Has anyone else here ever done that to start a small business? Do you repay the grant? Are interest rates lower? Is a Grant hard to qualify for? Am I better of with private investors?

thanks

Powersolo

 

[Var]

By definition a grant is not a loan, therefore not to be repaid.

If the US government is calling their loans "grants" then that is just doublespeak.

 

[davidsbiscotti]

Are you referring to an SBA loan, a loan through a qualifying lender that is backed by the government?

Govt. "grants" are reserved for special circumstances and if you qualify for one, it is not something you have to pay back.

 

[coffee_addicted]

You will find alot of good and helpful information here.
http://www.sba.gov/services/financialas ... index.html

and just an FYI the goverment does not give grants to business that are for profit.

 

[caffe biscotto]

....and just an FYI the goverment does not give grants to business that are for profit.

The SBA doesn't, you're right.

Unless I'm mistaken, agricultural loans as well as "grants" are available to farmers (at least in the U.S.), who meet certain growing requirements.

Also see: http://www.usagovernmentgrants.org/business_grants.html

 

[coffee_addicted]

Unless I'm mistaken, agricultural loans as well as "grants" are available to farmers (at least in the U.S.), who meet certain growing requirements.

Yes they do offer this type of grant for help with agriculture, I was refering to a Coffee Shop. Below is a quote from the SBA

Please Note that the U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs. While the SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments. (See Federal and State Technology Partnership Program)

 

[caffe biscotto]

There are dozens of government funding agencies and other programs to apply to. SBA is just one and they don't offer small business grants. But there are other federal, state and local grants available.

Low interest loans are available for such things as historical structures and special loans for businesses operated by women and minorities. You can call your local city and county development offices to ask if loans, grants or tax benefits are available.

My sister has some distant Native American relatives on her Dad's side and received government grants to help pay her way through her doctorate in psychotherapy.

In the US, we throw away tons of fresh unused food every day, it's too bad. In the same way, much of our tax dollars go unused in the applications for which they were intended. Find my tax dollars out there and use them!

You can also apply as an individual, versus applying a business owner.

If that doesn't work out, call your uncles and cousins, they might chip in a few grand to be a part of something cool like a coffee shop.

Good luck!!

 

[350zninja]

SBA loan is typically what people use to start a business. i have been looking into this as i am about to open a diff kind of business. Another good idea is always to buy an existing one. it shows its been opened but also it has been making money. banks are more likely to finance an existing shop, if its making money.

 

[caffe biscotto]

Good point about buying an existing business.

In my experience, SBA backed loans should be your last resort though, unless your credit isn't up to par with what banks like to see. The interest rate is generally a little higher than what the bank would charge and you'll be carrying Uncle Sam on your back until the loan is paid off.

On the bright side, I almost accepted an SBA loan once and was surprised at how quick and easy the application process was.

 

[tiffeny]

Well, I am a permanent resident here in the U.S and I would like to expand our business. My husband and I have a small business but I want to develop into a large business but we don’t have the money. I heard that there is free govt. grant money but can’t seem to find someone for applying for this money. How do I get a free govt. grant to start or increase a business? Any reference will be appreciated.

 

[sunshinecafe]

Oh my, the SBA is usually a good starting point. Take it from someone who bought a government grant program and got absolutely NOWHERE!!!
These programs make all kinds of promises of \"free\" money and do not deliver. It was very frustrating. Also I looked into grant money for expanding small business to large. I proposed that I would be creating jobs in our depressed little town and I still got shot down. The SBA informed me that you are still considered a small business until you have 200 + employees. Gee, I thought putting an additional 7-8 people to work would certainly qualify me for a grant .....but to my avail.....nooooo.
I quit trying. When I was seeking funds to open my shop, I was lucky enough to have a brand new harley-davidson that was bought and paid for, so I put it up for collateral, took me 5 years to pay it off but it was worth it!

 

[559624]

SBA

the SBA is by far and large the most common place to get loans from for start up businesses. You actually get the loan from a traditional institution like a bank however if you qualify for an SBA loan then the SBA will back up a certain percentage of the loan (I think its 80%). Since they backup x amount you''ll need to come up with the rest (20%) for down payment. This process takes time so plan for that. It took me 6 months to get mine. If you are getting a loan under $100,000 it can be done faster.

Other places to look are just going to banks without the SBA, friends or family, and perhaps venture capital. Whatever you do don''t put anything on credit cards no matter how tempting.

 

[AJPRATT]

I don't mean to sound mean, but there is no such thing as free money. I know there are a ton of TV spots touting it, but its just not there. We went the route of SBA funding. Its is not easy funding to get, either.

I have two suggestions: 1) Contact your local Small Business Development Center. They can help you with your business and put you in touch with lenders. and/or 2) Contact Luckman and Associates. They are business financial advisors who are based in Philadelphia but do work with folks along the east coast.

My final advice: Whatever you think you need... you WILL need more, at least 50% more, if for no other reason to have operating costs covered for the first 3-6 months.

 

[PinkRose]

Congratulations

Hello Anne,

Congratulations on the birth of your baby....
Your newest special: Mary Rose Pratt born 7/31/08!

I hope all is well and that you're having a wonderful time enjoying your new bundle of joy.


Rose

 

[AJPRATT]

Thanks, Rose!