I’ve been hanging out a lot at Yahoo Answers, and one of the most common questions asked in the Small Business section is “How can I get government grants to start my business?” This is a question that is asked over and over again everyday.

I have combed through the Catalog of Federal Domestic Assistance to find a single grant that provides money to would-be entrepreneurs and I have yet to see one. It seems that you’d be hard pressed to find any grant that would support a for-profit venture, let alone an individual.

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, I have yet to check the Foundation Center’s Foundation Grants for Individuals Online, but I know Foundation Center and they are the go-to place of all fundraising/development staffers of thinktanks in the DC area so I reckon they are a very reliable source. Their database is available only by subscription ($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.

I can certainly understand the allure of grant monies. Afterall, who does not want “free” money? It’s just that some people string together grant information and package it along the lines of free money-for-all-your-needs (including starting a business), even though the grants they list do not include entrepreneurs as target beneficiaries.

A year or so ago, I had a terse email exchange with a website publisher offering information on daycare, and one of the topics she covers include grant funds for starting a daycare business. I looked at her list of grants, and while she has many listed, none of the grants are for starting a for-profit daycare center! I pointed it out to her that she better check the grant information she’s putting out because she is packaging them as if all the federal agencies and private foundations she was listing actually gave money for creating a daycare business. Last week, I checked out her website and saw that she has put an explanation that there are hardly any grants for starting a for-profit daycare. I’d like to think that I had a hand in making her change her stance in her website :o)

Read full article