Federal Grants for Starting a Business
There are many sources of funding for starting a business. The federal government provides many different resources for starting, growing and expanding a a small, medium or large business. However, the federal government, specifically the Small Business Administration, does not offer grants to start a business. The business must be located in a specific area and provide a specific service in order to take advantage of available grants from certain federal agencies.
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Function
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Grants are monies offered by the federal government to qualified business owners that do not need to be repaid. These grants can be used for many different purposes but generally must meet the requirements of that particular agency. For example, the United States Department of Agriculture (USDA) offers a grant of $25,000 to $100,000 for use in developing rural businesses.
Types
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Federal grants for starting a business primarily come from the USDA and are permitted to be used for different things. The USDA offers grants for businesses in rural and tribal areas for assistance with agricultural and rural electric needs. Specifically, the Rural Business Enterprise Grant (http://www.rurdev.usda.gov/rbs/busp/rbeg.htm) is offered to governmental bodies to in turn be given to qualified businesses. The areas that the USDA is primarily provides grants to are rural areas that have a population of less than 50,000. They also provide this grant to qualified Native American tribal areas. If your business is engaged in renewable or efficient energy projects, you can apply for between a $2,500 to $500,000 grant from the USDA.
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Size
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The size of a federal grant can be as little as $2,500 or as much as $500,000. It depends on the current federal appropriation for that particular program. Grants.gov (www.grants.gov) is a clearinghouse of available federal grants for business, educational institutions, students and nonprofit organizations. Remember, a grant is not a loan, so it does not need to be repaid; however, the work done under the grant must serve the direct purpose for which it is awarded.
Benefits
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The benefit of a federal grant to a business is that the grant must be used to not only help the business, but in the long run, help the community. The grants offered are specifically designed to meet a need in a rural community or other area where the business can use the grant funds to improve the overall quality of life of the community, the employees and the environment.
Warning
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The United States Small Business Administration does not offer grants to businesses to start or grow a business. The Small Business Administration offers grants to select nonprofit organizations that offer professional and technical advice to business owners that need it. Their programs are free to use and should be taken advantage of. They will be able to steer the business owner in the right direction with respect to funding sources.
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