How to Get Free Money to Start a Business

Would you like free money to start a business? Grant money isn't easy to find, but it is available for entrepreneurs who are both patient and persistent.

For the purpose of your grant application, a small business is defined as an independently owned and operated business that is not dominant in its field of operation, has annual receipts of less than $500,000, and has fewer than 500 employees. Sole proprietorships, businesses that are owned and operated by one person, are also considered to be small businesses for the purpose of most grant applications.

Difficulty:

Challenging

Instructions

1. Turn to state resources. Although there are no small business grants available directly from the federal government, there are a number of state programs that can provide you with the money you need to start or expand your business. Most are administered through the state's economic development agency. Visit your state agency Web site for details.

2. Look for targeted financing for free money to start a business. Are you a woman, minority, or a person with a disability? There are many programs that specifically promote economic development activities for these groups. With a solid business plan, you could be a great candidate.

3. Consider choosing a rural location for your business. Some small business grants are based on location, with preference given to businesses that plan to operate in a rural community.

4. Look for opportunities related to your particular industry. For example, farm grants are available to farmers interested in purchasing renewable energy systems or making energy improvements to their property. These grants are administered through the USDA's Renewable Energy Systems and Energy Efficiency Improvements Program. Grant money can be used to support projects involving biomass, geothermal, hydrogen, wind, and solar energy.

Tips & Warnings

• When applying for small business grants, it's extremely important that you fill out the application correctly. Some programs have a policy of rejecting incomplete applications. Even if your application is accepted, incomplete information may delay your grant processing and jeopardize your chance of getting free money to start a business.

• Your local SCORE office can provide answers to many of the questions you may have about how to start your own business.

Resources

• 2009 Uncle Sam's Money Machine - Federal Grants, Government Assistance for People and Small Business