True Facts about Government Small Business Grants

A Home Business Article Contributed by Sharon Hill

What are Your Chances for a Government Small Business Grant?

Government Small Business Grants are few and far between. In spite of what those hyped-up expensive guide books will tell you, government small business grants are available in very limited supply to a very few US entrepreneurs.

Government small business loans and other government funding programs, which usually offer very attractively low interest rates, are available for a much larger group of small business would-be entrepreneurs.

We all know that small business is risky, with few surviving. In fact, only about ten percent are still going concerns by year five. This statistic makes the U.S. federal government very cautious about providing small business grants to entrepreneur applicants. Part of the reason as well is that taxpayers for the most part just don't want their tax dollars going to support someone else's entrepreneurial efforts.

Who Can Get a Government Small Business Grant?

There are only a few industries and circumstances that would qualify for government grants to small business owners.

Small business owners whose efforts include active technological research and development earn priority status for US government, small business grants . This does not mean these businesses are a shoe-in for federal U.S. grant dollars. It just means that they have a better chance than other industries.

A small business whose efforts are geared towards helping its own community grow and thrive are given top priority. This is especially true in economically deprived areas such as former manufacturing areas or those whose local military facility closed, whose area residents have suffered from closure or downsizing and need retraining to remain in their community. The government may consider offering a government business grant to these small businesses if they see clear proof that the area will benefit from the work of the business.

Government grants may also be given to small businesses that employ priority government groups - certain minorities and ethnic groups, disabled, veterans, and so forth.

Unless your small business can qualify in one of the above-mentioned ways and categories, you must face that fact that your odds of getting a small business grant are very low.

If You Can't Get a Small Business Grant, Can the U.s Government Assist Another Way?

The most common help your small business can expect from the U.S. government is through a small business loan - which, of course, unlike a grant, would need to be repaid. The most positive aspect of these government small business loans is that the interest rate is almost inevitably much lower than the rate of any other small business lender. The government is much less reluctant to lend than to grant because its risk is more minimal. If your business fails, the government will still probably get its money back plus interest.

Besides, the U.S. government realizes the prevalence, and the importance of small business to the American economy. Small and medium sized businesses (SMEs) are far more prevalent and give far more funds to United States tax coffers than any other business or individual category.