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How do I get a small business grant?

The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. While SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical or financial assistance. These grants generally support nonprofit organizations, intermediary lending institutions, and state and local governments.

For more information, visit the SBA's grants section or

Financing Facts

The majority of new businesses are initially financed by personal investments from the owner, family, friends and personal business contacts.

While it is not impossible, it is extremely difficult for start-up businesses and small businesses with less than three years of history to obtain outside financing.

Financing existing businesses through conventional lenders is possible if the business has shown growth in sales and profitability.

It is essential to keep complete financial records to present to lenders and investors.

Regardless of where you get your financing, you need to put together an organized and well-developed financing proposal.

Financing Questions

Before applying for a loan, here are a few questions you should ask yourself:

  • What kind of business person am I?
  • What do I need financing for?
  • Are the terms of the loan acceptable?
  • When do I need the financing?
  • How will I pay the money back?
  • How much money do I have to contribute to my small business?
  • How will capital make my business better?

Basic Loan Information

Credit Information: To get information on your credit rating, use the only official website for obtaining free annual copies of your credit report: Do not click on a website that someone else has provided for you nor one that you find by searching online. You may also call toll-free at 1.877.322.8228.

Capital: If you are seeking a loan, the financing institution will require that you personally invest money of your own in the business (about 25 to 30 percent of the loan amount).

Collateral: Collateral, such as real estate, is necessary to back up the loan. Business start-ups often use their home for collateral.

The Small Business Administration (SBA) site contains a wealth of information. Also, visit with your local banker for the bank's loan application procedures.

Also check out the Aurora-South Metro SBDC page.

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