Experience with starting a business and obtaining grants or loans...?

Question

I am wanting to start a business with my mother, and I don't want to go into much detail for obvious reasons, but it is a wonderful idea centered around children and mother nature (organic methods of life). Where would I start for planning the business and to get a loan or grant to help with the upstart? Please, only people who truly know this process!! I am very serious, and I am afraid that if we wait too long it will be too late.

Answer 1

You may want to check low-cost loans from the Small Business Administration will not be an option. In SBA's document "CREDIT FACTORS A POTENTIAL BORROWER SHOULD KNOW" http://www.sba.gov/financing/preparation/qualify.html you can qualify for an SBA loan if you have equity investment and collateral -- which both means money. SBA wants to see that you yourself is invested in your business, so they want to make sure that you have money in your business as well. Without money, then you cannot be approved.

Here are some articles that can give you ideas of what to do when you want to start a business if you have limited capital:

Starting a Business with Little Cash? http://www.powerhomebiz.com/vol30/nocash.htm
10 Rules for Starting A Business on a Shoestring Budget http://www.powerhomebiz.com/vol70/shoestringrules.htm
No Money? No Problem! http://www.entrepreneur.com/article/0,4621,288954,00.html
Seth Godin's Bootstrapper Bible http://www.changethis.com/8.BootstrappersBible
How to Start a Business With No Money http://www.smbtrendwire.com/start-business-no-money/

I suggest you read the following books as well. Borrow them from your library or buy them from your favorite bookstore

- No Cash, No Fear: Entrepreneurial Secrets to Starting Any Business with No Money by Terry Allen
- Starting on a Shoestring: Building a Business Without a Bankroll by Arnold S. Goldstein
- The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki

As for grants, I'm afraid it is hard to find grants to start a business. Unlike the myths that some perpetuate, federal government and even private foundations hardly give grant money for a for-profit business. And yes, grants mean PAPERWORK - lots and lots of it, that is why a cottage industry of grant writers was born.

Nonetheless, you can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov - these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture.

Even if you buy books on "how to get grants" or list that supposedly has information on grants -- all of them are mere rehash of what CFDA has, albeit packaged differently. But still the info is the same - hardly any grants for starting a for profit business.

Even SBA does NOT give out grants. From the SBA website http://www.sba.gov/expanding/grants.html...

"The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. (See http://www.sba.gov/financing for more information) While 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."

Here is a listing of federal grants for small businesses. See if there is any available for individuals for starting a business -- THERE'S NONE.
http://12.46.245.173/pls/portal30/CATALOG.BROWSE_BENEF_RPT.show

Most of the federal grants are given to specific target groups with specific requirements (e.g. minority business owners involved in transportation related contracts emanating from DOT - Grant#20.905 Disadvantaged Business Enterprises Short Term Lending Program

Grants are also often given to non profit groups or organizations involved in training or other similar activities (grant 59.043 Women's Business Ownership Assistance that are given to those who will create women's business center that will train women entrepreneurs

For private grants, you may want to check the Foundation Center's Foundation Grants for Individuals Online. It's a subscription based website ($9.95 per month) but their opening blurb only says that the database is ideal for "students, artists, academic researchers, libraries and financial aid offices." Entrepreneurs are apparently not one of them, so I take it they also don't have listings of private foundations who give grants to would-be entrepreneurs.

Answer 2

imisidro has great information about grants -- she's the #1 Answerer in the Business & Finance section.

As far as starting the business & loans are concerned...

The best routes to take are to research the process of starting a business as well as the industry you're interested in.

I recommend checking out the SBA, Entrepreneur, The Start Up Journal & Nolo. All 4 are great informational resources for the new/small business owner. I posted links for you in the source box.

Research, research, research – this cannot be stressed enough. Read as much as you can. Here are some book titles that are relevant:

Starting a Business Specific:
* How to Really Start Your Own Business, Fourth Edition by David E. Gumpert
* How to Really Create a Successful Business Plan: Step-by-Step Guide by David E. Gumpert
* What No One Ever Tells You about Starting Your Own Business: Real-Life Start-Up Advice from 101 Successful Entrepreneurs (What No One Ever Tells You About Starting Your Own Business) by Jan Norman
* Business Start-Up Kit by Steven D. Strauss
* Start Your Own Business (Entrepreneur Magazine's Start Up) by Rieva Lesonsky

Loan Specific:
* How to Get a Small Business Loan: A Banker Shows You Exactly What to Do to Get a Loan (Small Business Series, No 1) by Bryan E. Milling
* The SBA Loan Book: Get A Small Business Loan--even With Poor Credit, Weak Collateral, And No Experience by Charles H. Green
* The Insider's Guide to Small Business Loans by Dan M. Koehler

There are plenty of free informational resources out there. Check the source box for links to articles.

Hope that helps! I wish you much success & happiness in all your ventures!

Answer 3

It really doesn't happen unless you have a track record. I tried opening up a business. I needed about $15,000 of which I had $5,000 to put in myself. My credit score was 710, not at the best point, but not bad either. The best my back could do was $5,000 secured with my condo, which has about $20,000 equity in it.

Answer 4

Go to your local chapter of the Small Business Association, it is a government program and they are in every state. they have been a big help to me, offered some great advice and I took a few classes with them. GOOD LUCK

Answer 5

Here is a site about obtaining grants. I can't tell you if the info is reliable (as with any site) so do your homework.

http://home-business.yourinfopalace.com/Home_Based_Business_for_Women.php