SBA Grants to Assist Micro Entrepreneurs

Posted by: Mike Clough | October 2nd, 2009

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More than 50 Non-profit Organizations to Receive SBA PRIME Grants to Assist Micro Entrepreneurs

sbalogo The U. S. Small Business Administration announced today that 58 non-profit organizations from 32 states and the District of Columbia will receive grant funding under the Program for Investment in Micro Entrepreneurs Act (PRIME) to assist low-income and very low-income entrepreneurs with training and technical assistance to start, operate, and grow their businesses.

Competition for PRIME grants was open to applicants in all 50 states and the U.S. territories. SBA received more than 400 applications. Last year, SBA funded 35 grants in 12 states on a non-competitive basis.

“The SBA remains committed to helping small businesses start, grow and succeed, and PRIME is one of our many tools for doing this,” said SBA Administrator Karen Mills. “Thanks to larger funding this year, we were able to provide grant dollars to more recipients across more states. These grant recipients are on the front line of helping entrepreneurs in particularly underserved communities with critical tools to help them maximize the potential of their businesses, create jobs and help strengthen the local economy.”

SBA’s PRIME grant funding is intended to establish management and technical assistance, access to capital and other forms of financial assistance, and business training and counseling through qualified organizations to small businesses with five or fewer employees that are economically disadvantaged, and to businesses owned by low-income individuals, including those residing on Indian reservations and tribal lands.

The grant funding received will be used to provide training and technical assistance to disadvantaged micro entrepreneurs, to provide capacity building services to organizations that assist with microenterprise training and services, and to aid in researching and developing the best practices in the field of micro enterprise development and technical assistance programs for disadvantaged micro entrepreneurs.

This year’s total program funding amounts to $5 million. Grants range up to $250, 000 with a 50 percent match required of the recipient organization. The PRIME grant is open to micro entrepreneur training and technical assistance providers in all 50 states and the territories, and has a one year performance period, with four 12-month options.

To view a list of non-profit organizations receiving these grants, click here. For more information on these and other small business activities, visit the SBA website.

If you would like to contact me, you can do so by emailing me at mike.clough@bestbizpractices.org or visiting my LinkedIn page.

Posted by: Mike Clough

Posted in Finance,Funding,SBA Loans,Small Business News,Start-Ups | Tags: micro enterprise, micro entrepreneurs, PRIME Grants, Program for Investment in Micro Entrepreneurs Act, sba, SBA Loans, small business, small business administration, smallbiz

Responses

I’m with AmeriPlan. I now have my own office called :AmeriPlan Sign-In Center.

I would like to know how does SBA loans help small business that’s an entrepreneur’s in networking?

By: Sharon Berry on October 3rd, 2009
at 12:23 pm

Sharon, I am not sure how to answer your question. SBA makes it easier to secure business loans by guaranteeing them. But the bank still has to make the loan and you still have to build a good case for the bank.

By: Mike Clough on October 3rd, 2009
at 4:42 pm

First, If I had $250,000 for ‘matching funds’ I wouldn’t need the SBA’s money for my venture.

Second, government ‘grant’ money often requires that up to 50% of the money be spent writing reports back to the granting agency.

And, third, why is SBA money going to non-profits? I thought Small Business was (mostly) about making a profit.

So I guess I wont apply.

By: Dann Flesher on October 5th, 2009
at 3:04 am

Dan, thanks for reading my blog and for posting your thoughts.

Please allow me to address your concerns in reverse order as I understand things. But before I do, let me clear up the misconception that SBA loans money. It does not. It only guarantees loans made by other financial institutions.

Now in the case of this article, SBA is issuing grants not loans. Grants do not need to be paid back while loans do. These grants were indeed made to non-profits who had the matching funds that they raised from wherever.

The purpose of these grants (and the matching funds) is to make micro loans (very small loans of $1,000-$5,000) to micro businesses (fewer than 5 employees) where the owner is low income or very low income. The resulting loans do not require matching funds from the borrower.

As you can imagine, these are high risk loans. Many will never be paid back. This is why SBA requires matching funds from the non-profit who receives the grant and will administer the loans. Yet, some of these entrepreneurs will succeed and possibly become a larger employer.

Of course, this is just one of several SBA programs (e.g. 7(a), 504, ARC, etc.) for all sizes and situations of small business.

I hope this explains things a little better.

Again, Thanks for reading my posts Dan. Good luck on your ventures!

Mike Clough

By: Mike Clough on October 5th, 2009
at 8:27 am

Do you know which states are getting the grants and which non-profit organization are providing them?

Why only 32 states and not nationwide?

By: Sal Duran on October 17th, 2009
at 11:40 am

Sal, there is a link above (second to last paragraph) to a list of states and organizations receiving the grants.

As to why only 32 states, I believe it is because the other states did not qualify for one reason or another.

By: Mike Clough on October 17th, 2009
at 12:51 pm

I had heard that SBA does not give grants but only loans. It is a revelation that SBA gives grants as well.

By: Steven Faircloth on October 22nd, 2009
at 5:19 am

Steven, the grants were not directly to small businesses but rather to non-profits that loan to very low income entrepreneurs in small amounts (under $5,000). Of course, these are very high risk loans and many are not paid back. This is why there are grants to help the non-profits that put up matching funds.

By: Mike Clough on October 22nd, 2009
at 11:46 am

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