Frequent watchers of late night television often think that simply applying for a government grant will give them the necessary capital to start a business. While there are a lucky few who get their money that way, they are very few, and very far between.

To receive a grant to start a business it is necessary to be a part of the group for which the grant money is intended and to meet other criteria. While some people do receive grants, and some people do win the lottery, there are more practical and more likely methods.

One of those methods is offered by the SBA, the Small Business Administration While the SBA does offer loans, it offers very few loans directly and prefers to guarantee loans made by banks. The guarantee is valuable because banks are more willing to make a loan knowing that if the loan is defaulted the SBA will make the payments, and knowing that after SBA qualification the rate of default is very low.

Another way to get government help with a small business start up is to locate your business in en Enterprise Zone. These zones are also called Empowerment Zones, and are designed to create economic growth in certain areas that are in need of economic assistance.

In an Empowerment Zone or Enterprise Zone taxes, many times local, state and federal, are waived for a business to encourage the business to come into an area and create jobs. These zones are sometimes located in rural areas that have lost indigenous industry. Others are located in urban areas that have become rundown and need to be built up.

Members of some groups or communities who have suffered a particular hardship, such as the victims of Hurricane Rita and Hurricane Katrina are often given preferential status for business loans to encourage them to start up in areas that were damaged economically.

One of the most overlooked areas of government assistance in business start up is in the area of education, perhaps the most valuable commodity a new entrepreneur can have. Pell Grants and federal student loans make it possible for many people to go to college or technical school. A budding entrepreneur can use a Pell Grant to cover books and tuition to acquire a degree in business and gain the knowledge necessary for success, and increase the chances of creating a successful business.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Tagged with: • •

Filed under: Articles • Financing a Business

Like this post? Subscribe to my RSS feed and get loads more!