Comments on: SBA Grants to Assist Micro Entrepreneurs

By: Mike Clough

Mike Clough — Thu, 22 Oct 2009 16:46:31 +0000

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: Steven Faircloth

Steven Faircloth — Thu, 22 Oct 2009 10:19:32 +0000

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

By: Mike Clough

Mike Clough — Sat, 17 Oct 2009 17:51:20 +0000

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: Sal Duran

Sal Duran — Sat, 17 Oct 2009 16:40:01 +0000

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: Mike Clough

Mike Clough — Mon, 05 Oct 2009 13:27:00 +0000

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: Dann Flesher

Dann Flesher — Mon, 05 Oct 2009 08:04:12 +0000

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: Mike Clough

Mike Clough — Sat, 03 Oct 2009 21:42:29 +0000

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: Sharon Berry

Sharon Berry — Sat, 03 Oct 2009 17:23:27 +0000

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?