The Eastern New Mexico News - Serving Clovis, Portales and the Surrounding Communities

Free money for businesses? Whatever


November 13, 2006

Many people have viewed the infamous commercials with the “Question-Mark Man,” Matthew Lesko, that usually air late at night or early morning advertising “free” money from the U.S. government. Is there “free” money, or grant money, to expand or start a business?

My colleagues around the nation and I cringe every time the question is asked, “Where can I get a grant to start my business?” The response: “There is not an abundance of grant money available to a business operating under ‘for-profit’ status.”

Most grants are designated for nonprofit organizations that help children or the elderly, or promote social issues or education. Rarely or almost never will one find a grant to start a retail or service business.

In the 16 years I have worked at the Clovis Community College - Small Business Development Center, there have been a few programs that offered legitimate debt-free (grant) money. Most have been in the form of a contest sponsored by a local utility or software company.

There are other companies advertising “free” monies to start a business. Their advertisements include an enticement to send money or attend a seminar to learn where and how to get debt-free (grant) money. Usually the cost ranges from $399.95 to $900 or more. Once the material is received, it becomes clear that the information is from the Internet or government records outlining technical assistance programs available to businesses and details money available to non-profit organizations providing health services, business advice or community youth activities.

However, there is a legitimate government grant program — the Small Business Innovative Research (SBIR) program. It offers grants for research and development in the areas of defense, space, high-tech, biotech, energy savings and recycling. The competition is highly competitive and the monies are restricted. For example, funds are not awarded for the purchase of inventory, equipment, real estate or advertising, or for working capital, to name a few of the restrictions.

The bottom line is “buyer beware.” There are many scammers out there waiting to pry on innocent people (and take your money). According to the Federal Trade Commission, if a grant requires money up front, it usually is a scam.

Do your research before sending money or attending seminars about grants.

Here are some tips for investigating companies that advertise grants:

• Make sure the company has a phone number that you can call and the phone is answered — not just one that only accepts a message and returns your call later.

• Check with Directory Assistance to see if the number you have belongs to the company.

• Contact the Better Business Bureau, the police and the sheriff’s office where the company is located. Ask about complaints they may have on the company.

• Check to see if the company has a pattern of complaints or pending litigation with the city attorney or state attorney general.

If you decide to send the company a payment, try to send it to a physical address instead of a post office box number.

Visit the Federal Trade Commission Web site for additional tips —

Free money for a business – what a novel idea!

Sandra Taylor-Sawyer is director of the Small Business Development Center at Clovis Community College. Call the center at 769-4136 or visit


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