Are grants to start a business B.S.?

[87grandnat]

I always hear about being able to get a grant to start a business, and I now would like to say "f it" and try to start one, I have been so terrified of what could happen, odds, this and that, etc..that I have been talked out of it many times and am feed up. I know that it is not easy and having the funding is very very important.

Sorry for the semi rant, but back to my question. For the people that have started a business......how did you go about getting the funding? Is a grant from the government or where ever they come from possible? Have ya'll just gotten business loans or what? I have some money but would definitely need more, my credit is awsome and I know I could get a loan for what I need but was just curious if there was any other options and routes others have took.

Sorry if I jumped around but I just had alot to say and ask,
Joshua

 

[tjthorson]

Well, when I started my business, I was a 33 year old, midwestern, suburban, white boy.

i couldnt find grants, loans, etc....

EVERYTHING was a personal loan with a personal guarantee.

I ended up taking a Home Equity Loan. Once in business for a year, I took out an SBA "Quick loan". Max $35,000, one small application - basically a business line of credit (with the personal guarantee).

If I was a woman, minority, gay, albino, or any other of a about a million things, it seems the loans and grants are easier to get....

If you fit one of those descriptions, contact a bank that writes SBA loans and go to work. Also, join the NASE - they are a great help as well.

 

[87grandnat]

Well I am a 25yr old, midwestern, suburban, whiteboy too so I guess its gonna be hard for me as well.

I know I can get a loan but I guess I need to go find out some more info on it.

 

[Christophah]

Don't even think about getting a grant. You won't get it. I too am a midwestern white boy. A friend of mine wanted to start his own business, so he looked into getting a grant. He went downtown to fill out an application, and the guy at the window told him, and I quote:

"Sir, honestly unless you are black or handicapped don't waste your time filling this out."

Isn't THAT bullpooop!! That is the way of the world these days..............

 

[GNJimC]

Probably may not matter...

.... but the type of business it is, could open some more doors, not sure but there are a few more things availible for certain specilized industries such as Bio-Fuels for example (however a 100K grant for a $60 Mil plant does not go a long ways) Check with your state as well, could be somthing if you are hiring x amount of people etc. However if you are starting say a lawn mowing business, dont hold your breath (nothing wrong with mowing lawns if that is what it is)

Good luck on your endevor. I own 1/2 of my business and have had job offers that could pay more but I like the flexibility. Many of my friends will joke about me being able to come and go as I please, however instead of 1 boss, I have several, they are called clients.

 

[87grandnat]

Thanks for all the advice and honesty. I have another question.....to purchase a home, like if I was trying to get into real estate (not original plan but I want to do it as well) do you have to be employeed with a good job to get a loan or whatever to purchase it? I left my job about 2 months ago so I am not employeed (just work a part time job) but would still like to buy a home for investment reasons, is this possible? I could come up with some money for a down payment and have excellent credit, but didnt know how much of a role that would play.

Thanks again,
Joshua

 

[SouthernCal GN]

Traditional lenders will look pretty hard at:

• the ability to repay the loan
• job stability and longevity
• creditworthiness
• loan to value

If your credit is excellent, you may be able to do a no-doc loan; the offset is that they usually have higher points and APRs.

 

[87grandnat]

thanks

 

[GNJimC]

SoCal hit pretty much everything on the head. I am not an expert at mortgages, but you mention "some" money for a down payment. If that "some" is 20% of the purchase price then you will avoid paying Private Mortgage Insiurance (PMI). I know you can get loans with less than that % down, however but you still have to pay the PMI. I think there are ways around it from what I have been told, but the recent mess with sub prime lenders could and probably would impact this. If a real estate salesperson or mortage sales person says "oh you can afford this" dont listen to them. Only you can decide if you can afford to or not. I am not sure on the current ratios they look at for % of income towards paying off the note, but 41% pops into my mind. To me, that is alot of monthly income going towards housing. Also dont bite off on the "the house will appreciate in a year or two so get in now" theory. There are plenty of people going into foreclosuer now after thier 2 or 3 year ARMs are expiring, intrest rates are higher and the house did not appreciate at all. On the flip side, in some areas this could lead to a buyers market. If you plan on "flipping" the house remember, if the house is bought right, the house is half sold.

Good Luck

 

[SouthernCal GN]

Good rule of thumb is 33%. Most people are able to meet the criteria; the problem is that a lot of people won't cut out excess expenditures (cigs, fast food, movies, etc) for the short term to gain the long term benefit of home ownership.

If you're military/vet, check the VA programs. Also, public service organizations (police/fire/teachers/etc) are often offered special rates/terms.

 

[SS_Sean]

just Ask Lesko!!!!!

 

[87grandnat]

thanks for all the replies and extra info

thanks,
Joshua

 

[cwmccray]

If I was a woman, minority, gay, albino, or any other of a about a million things, it seems the loans and grants are easier to get....

I am a minority male and IT IS TOUGH for me also. I tried to get a SBA and a Grant and the loan couselors did everything but BEND me over directly. They asked for everything but my first born.

So I started my consulting business from savings account. I made alot of money but at the end of the year taxes caused me to break even. I do not consult as much due to being a single parent (I have a 4yr old girl in private daycare... enough said!).

I just got my MBA in 06. I have a couple of business ideas. I now have written a couple of business plans and have a couple of franchise in mind. BTW, my first business was lawn care. I actually got too big and had to scale it back...(My day job was Chief Technical Officer - CTO of a ISP). Hindsight, I should have bought a couple of trucks and got a couple
more guys and kept the contract:frown: .

I am still young (39)