“Can I get a grant to start my business?” is the most frequently asked question we receive. After more than 20 years working with federal grants, the answer remains the same: No. The federal government does not provide grants for people to start, or expand, a business.
The “free government money” myth started years ago through infomercials featuring Matthew Lesko (in his question mark-covered suit) and Kevin Trudeau telling audiences about government funds they don’t want you to know about. These two, and others, are interested in only one thing: selling products to make a quick buck. (By the way, Trudeau is currently serving a ten year sentence in federal prison for contempt of court and deceptive business practices.)
Search engine results for “government grants to start a business” point to websites of people selling books or to advice columnists describing the concept of grants but never specifically mentioning a federal grant’s name or the federal department(s) providing the grant(s). They can’t provide specifics because the grants don’t exist.
Grants are created by Congressional action, and funding appropriations, to support a variety of public benefits (e.g., research, education, the environment, international aid, healthcare, highways, etc.). While some federal grants are available to individuals and to small businesses, they are primarily for research endeavors and they are made to highly qualified, established professionals or businesses—not to start-up companies looking to get off the ground. According to grants.gov, between July 2005 and April 2015, over 3,700 federal grants were available to individuals and small businesses; 70% of those grants were for research purposes.
People interested in starting their own business need to hustle for start-up funds the old fashioned way: borrowing from family; friends; investors; their savings and retirement accounts; and/or banks. Once the business is operating (and financially stable), if it provides goods or services that can be marketed to the federal government, the owner(s) should consider applying for federal contracts. Uncle Sam purchases billions of dollars in products and services every year. Small businesses can take advantage of public contracts to generate reasonably stable cash flow in strong and weak economies. But, that’s a topic for another post.