But, is there really free money out there for small and home-based businesses? The answer is "Yes" and "No."

There are hundreds of millions of dollars in grant funding available free to entrepreneurs and small business owners. These grant monies come from the government, non-governmental organizations, and private institutions. The grant amount ranges from $5,000 up to some in the six figures. Best of all, absolutely none of them requires a pay back. You, too may have seen or read advertising in this regard.

However, the myth of "free money" intended for starting or expanding a small business needs to be dispelled.

Most funding institutions do not provide grants or "free money" for starting or developing a business. The Small Business Administration, Bank of America Foundation, and other grant funding sources do not give capital to start a day care or clothing design business, etc.. Nor do they provide grants to individuals who will use the proceeds to start their own "for profit" small business.

Rather, funding organizations generally target their assistance towards specific groups, types of organizations or activities. The grants provided by SBA are normally given to nonprofits or educational institutions. The Bank of America Foundation considers charitable requests from nonprofit organizations in geographic areas where the company has a business presence. These funding institutions provide funds mostly in a "project" context, consistent with their organization's goals and objectives.

There are a few grant sources that provide money directly to individuals. However, the use of the grant proceeds must be consistent with the objectives of the funding institution. Since most grants are project-based, many funding organizations require that the applicant provide counterpart funding. Grants may cover only a fraction of the project cost; very rarely do grants cover 100% of the total cost.

Take for example the Indian Grant Program given by the Bureau of Indian Affairs. This program gives up to $100,000 to American Indian individuals. However, the grant stipulates that the funds must be used for "development of profit-oriented businesses that will have positive economic impact on Indian Reservation." Furthermore, the grant must be no more than 25 percent of project costs - meaning that the individual must provide 75 percent counterpart money for the project.

Entrepreneurs and would-be business owners seeking grant funding for a project can check out the following books and web sites in the US and other countries. Note that some of the sites are free, while others require subscription.

"The Complete Guide To Getting A Grant: How to Turn Your Ideas into Dollars "by Laurie Blum 

"Free money for Small Businesses and Entrepreneurs" by Laurie Blum 

Winning Grants Step by Step: Support Centers of America's Complete Workbook for Planning, Developing, and Writing Successful Proposals by Mim Carlson 

Free Money to Change Your Life by Matthew, Lesko, et al 

"Free money from the federal government for small businesses 
and entrepreneurs" by Laurie Blum 

Catalog of Federal Domestic Assistance http://www.cfda.gov 
An easy-to-use database of all grants and assistance provided by the United States federal government. You can search by functional area, by agency, by keywords, etc. Use of the site is free.

Grants Canada http://www.grantscanada.com/  
A paid database service that lists programs and contact information on federal, provincial and regional assistance programs in Canada. Their online database lists hundreds of programs offering financial assistance for Canadian businesses and individuals including grants, low-interest loans, technical assistance and more. Access to the database requires an annual subscription payment of $99 (Canadian dollars).

J4B http://www.j4b.co.uk  
A free repository of information businesses in the United Kingdom seeking grants, soft loans, financial assistance, and help-in-kind. The database contains loans and grants for business start-up, research and development, export and trading, training and education, among others. Access of the database is free, but registration is required (and you must have a UK post code).

U.S. Small Business Administration http://www.sba.gov/expanding/grants.html 

This site is a listing of grant programs supported by the SBA. Note that SBA does not offer grants to business starts-ups; rather they give grants to non-governmental organizations, intermediary lending institutions, and state and local governments. Use this list to check out some of the programs that SBA supports and find one that you may qualify.

CanadaOne: Grants and Loans for Young Entrepreneurs in Canada http://www.canadaone.com/magazine/loan_programs.html  

This site lists the available grants for young entrepreneurs in the Canadian provinces/regions of Alberta, Ontario, Quebec, New Brunswick, Yukon, Atlantic Canada, and Western Canada. It also includes a list of national programs for young entrepreneurs.

Looking for funds to finance a small business is a difficult process; with the process made more confusing by the abundance of myths and scams in searching for free money.

• Be very wary of anyone who promises or guarantees they can get you a grant or a loan, particularly if you must pay in advance for the service. 
• If you are tempted to respond to one of these offers because of a money-back guarantee, be aware that they may impose so many conditions it could be difficult to ever get your money back. 
• If you are experiencing financial problems and believe you may qualify for some kind of aid, check with your city or state unemployment or social assistance office. 
• Check the Better Business Bureau for complaints about a company before sending money. 
• Advertising in recognized media outlets or on the Internet does not guarantee the legitimacy of the company behind the ad.

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