Government Grants Local Federal Benefit Cash Flow Problems

Many Americans "mistakenly" (incorrectly) believe that the U.S. government "awards" (gives to the winner of a competition) "grants" (money that is given to a person or organization for a particular purpose and does not need to be paid back) to open or "expand" (grow) small businesses, but this simply is not true. "Entrepreneurs" (people who start their own business) are often "sorely" (very) disappointed when they learn that "federal" (national) grants are available only to nonprofit organizations and local and state government agencies.

For example, the federal government often awards grants to nonprofit organizations involved in medical research or the development of more "efficient" (producing more with less) sources of energy. These activities benefit all members of "society" (the people living together in a particular country, region and/or culture), so it makes sense for the federal government to support those activities financially. In most cases, it does not make sense for the federal government to award grants to an entrepreneur opening a new restaurant or a retail store, because those businesses benefit only the owner and a "handful" (a small number) of employees.

Some state and local government agencies award grants to entrepreneurs, but the entrepreneurs usually have to "match" (provide an equal amount) those grants with bank loans or personal funds. These grants are usually awarded to "stimulate" (improve; make something grow) the local economy - not just to help someone start a new business. However, entrepreneurs can benefit from many programs that are designed to help them apply for low-interest loans and receive inexpensive or free business advice.