Does the SBA have business grants? No, the SBA does not provide grants for the purpose of business start-up or expansion. The SBA does offer several loan programs, which are explained in the “Financing” portion of this website.

But I’ve heard about grants available for: (see list below)

• Women-owned businesses
• Minority-owned businesses
• Minority women-owned businesses
• Disabled business owners
  
  Where can I get one?
  Regardless of what you may see on television in commercials or infomercials, or what you may hear from friends or others, the fact is---there is no government agency or private foundation giving out free money to start a small business, even if you are a woman, minority, economically or physically challenged.

  The fact is that most grants are awarded to non-profit organizations. A few go to businesses that do research and development geared toward crucial government projects. These grants are extremely specific in nature and often quite technical. These funds are not available to people who are interested in opening restaurants, hair salons, day care centers, coffee shops and more common small businesses.

Are there any restrictions on the type of business that can receive an SBA business loan? Businesses that are ineligible for SBA financial assistance include: not-for-profit organizations and businesses which deal in real estate investments, religious indoctrination, pyramid sales and distribution, or illegal activities.

Does the SBA help finance small businesses? Yes, the SBA offers a variety of financing options for small businesses. The SBA's assistance usually is in the form of loan guaranties - the SBA guarantees loans made by banks and other private lenders to small business clients.

What is a business plan and why do I need one? A business plan precisely defines your business, identifies your goals and serves as your firm's resume. Its basic components include a current and pro forma balance sheet, an income statement and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package. Additionally, it can tell your sales personnel, suppliers and others about your operations and goals.

Why do I need to define my business in detail? It may seem silly to ask yourself, "What business am I really in," but some owner-managers have gone broke because they never answered that question. Example: A watch store owner realized that most of his time was spent repairing watches while most of his money was spent selling them. He finally decided he was in the repair business and discontinued the sales operations. His profits improved dramatically.

How much money do I need to get started? Once you have taken care of your building and equipment needs you also must have enough money on hand to cover operating expenses for at least a year. These expenses include your salary as the owner and money to repay your loans. One of the leading causes of business failure is insufficient start-up capital. Consequently, you should work closely with your accountant to estimate your cash flow needs.

What are the alternatives to financing a business? Committing your own funds is often the first financing step. It is certainly the best indicator of how serious you are about your business. Risking your own money gives confidence for others to invest in your business. You may want to consider a partner for additional financing. Banks are an obvious source of funds. Other loan sources include commercial finance companies, venture capital firms, local development companies and life insurance companies. Trade credit, selling stock and equipment leasing offer alternatives to borrowing. Leasing, for example, can be an advantage because it does not tie up your cash. Ask your local SBA office for information about these various sources.

What do I have to do to get a loan? Initially, the lender will ask three questions:

• How will you use the loan?
• How much do you need to borrow?
• How will you repay the loan?

When you apply for the loan, you must provide projected financial statements and a cohesive, clear business plan which supplies the name of the firm, location, production facilities, legal structure and business goals. A clear description of your experience and management capabilities, as well as the expertise of other key personnel, will also be needed.

Where can I get help? The U.S. Small Business Administration has offices in nearly every major city in the country.

• The SBA operates the toll-free "Answer Desk" at 1-800-8-ASK-SBA (1- 800-827-5722), to give callers direct referral to appropriate sources of information.
• Sponsored by the SBA are a variety of counseling, training and information services including the Service Corps of Retired Executives (SCORE), Business Information Centers (BICs), Small Business Development Centers (SBDCs) and Women's Business Centers (WBCs).
• In addition, procurement center representatives can be found at each major military installation. More than 2,700 chambers of commerce are located throughout the country to provide additional assistance.
  

How much money do I need to have in order to qualify for an SBA loan? A borrower's capital contribution generally must be one-fifth to one-third of the total project cost.