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Are grants to start a business B.S.?

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87grandnat

Active Member
Joined
Oct 14, 2003
Messages
1,909
I always hear about being able to get a grant to start a business, and I now would like to say "f it" and try to start one, I have been so terrified of what could happen, odds, this and that, etc..that I have been talked out of it many times and am feed up. I know that it is not easy and having the funding is very very important.

Sorry for the semi rant, but back to my question. For the people that have started a business......how did you go about getting the funding? Is a grant from the government or where ever they come from possible? Have ya'll just gotten business loans or what? I have some money but would definitely need more, my credit is awsome and I know I could get a loan for what I need but was just curious if there was any other options and routes others have took.

Sorry if I jumped around but I just had alot to say and ask,
Joshua
 
Well, when I started my business, I was a 33 year old, midwestern, suburban, white boy.

i couldnt find grants, loans, etc....

EVERYTHING was a personal loan with a personal guarantee.

I ended up taking a Home Equity Loan. Once in business for a year, I took out an SBA "Quick loan". Max $35,000, one small application - basically a business line of credit (with the personal guarantee).

If I was a woman, minority, gay, albino, or any other of a about a million things, it seems the loans and grants are easier to get....

If you fit one of those descriptions, contact a bank that writes SBA loans and go to work. Also, join the NASE - they are a great help as well.
 
Well I am a 25yr old, midwestern, suburban, whiteboy too so I guess its gonna be hard for me as well.

I know I can get a loan but I guess I need to go find out some more info on it.
 
Don't even think about getting a grant. You won't get it. I too am a midwestern white boy. A friend of mine wanted to start his own business, so he looked into getting a grant. He went downtown to fill out an application, and the guy at the window told him, and I quote:

"Sir, honestly unless you are black or handicapped don't waste your time filling this out.":eek:

Isn't THAT bullpooop!! That is the way of the world these days..............
 
Probably may not matter...

.... but the type of business it is, could open some more doors, not sure but there are a few more things availible for certain specilized industries such as Bio-Fuels for example (however a 100K grant for a $60 Mil plant does not go a long ways) Check with your state as well, could be somthing if you are hiring x amount of people etc. However if you are starting say a lawn mowing business, dont hold your breath (nothing wrong with mowing lawns if that is what it is)

Good luck on your endevor. I own 1/2 of my business and have had job offers that could pay more but I like the flexibility. Many of my friends will joke about me being able to come and go as I please, however instead of 1 boss, I have several, they are called clients.
 
Thanks for all the advice and honesty. I have another question.....to purchase a home, like if I was trying to get into real estate (not original plan but I want to do it as well) do you have to be employeed with a good job to get a loan or whatever to purchase it? I left my job about 2 months ago so I am not employeed (just work a part time job) but would still like to buy a home for investment reasons, is this possible? I could come up with some money for a down payment and have excellent credit, but didnt know how much of a role that would play.

Thanks again,
Joshua
 
Traditional lenders will look pretty hard at:
  • the ability to repay the loan
  • job stability and longevity
  • creditworthiness
  • loan to value

If your credit is excellent, you may be able to do a no-doc loan; the offset is that they usually have higher points and APRs.
 
SoCal hit pretty much everything on the head. I am not an expert at mortgages, but you mention "some" money for a down payment. If that "some" is 20% of the purchase price then you will avoid paying Private Mortgage Insiurance (PMI). I know you can get loans with less than that % down, however but you still have to pay the PMI. I think there are ways around it from what I have been told, but the recent mess with sub prime lenders could and probably would impact this. If a real estate salesperson or mortage sales person says "oh you can afford this" dont listen to them. Only you can decide if you can afford to or not. I am not sure on the current ratios they look at for % of income towards paying off the note, but 41% pops into my mind. To me, that is alot of monthly income going towards housing. Also dont bite off on the "the house will appreciate in a year or two so get in now" theory. There are plenty of people going into foreclosuer now after thier 2 or 3 year ARMs are expiring, intrest rates are higher and the house did not appreciate at all. On the flip side, in some areas this could lead to a buyers market. If you plan on "flipping" the house remember, if the house is bought right, the house is half sold.

Good Luck
 
Good rule of thumb is 33%. Most people are able to meet the criteria; the problem is that a lot of people won't cut out excess expenditures (cigs, fast food, movies, etc) for the short term to gain the long term benefit of home ownership.

If you're military/vet, check the VA programs. Also, public service organizations (police/fire/teachers/etc) are often offered special rates/terms.
 
If I was a woman, minority, gay, albino, or any other of a about a million things, it seems the loans and grants are easier to get....

I am a minority male and IT IS TOUGH for me also. I tried to get a SBA and a Grant and the loan couselors did everything but BEND me over directly. They asked for everything but my first born.

So I started my consulting business from savings account. I made alot of money but at the end of the year taxes caused me to break even. I do not consult as much due to being a single parent (I have a 4yr old girl in private daycare... enough said!).

I just got my MBA in 06. I have a couple of business ideas. I now have written a couple of business plans and have a couple of franchise in mind. BTW, my first business was lawn care. I actually got too big and had to scale it back...(My day job was Chief Technical Officer - CTO of a ISP). Hindsight, I should have bought a couple of trucks and got a couple
more guys and kept the contract:frown: .

I am still young (39):cool:
 
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