Financing your Business- A Word About Grants and Credit
GRANTS for small businesses:
There are some grants out there for entrepreneurs. However, despite the popular peception, very few grants are available for private, for-profit businesses. And they tend to have very specific eligibility criteria, so it is generally not advisable to rely on grants as a source of funding.
For more information, see the list of grant and loan opportunities below or call MERIT’s program director, Forrest Peck at (503) 399-5088. For information on low-interest Small Business Association loans, see the SBA website: www.sba.gov. For a resource guide on financing your business from USDA Rural Development, click here.
Online Grant Databases for Non-Profits:
www.grants.gov – the federal government’s grant directory
www.cfda.gov – the Catalog of Federal Domestic Assistance
Guidestar.com – a source for current grant awards from foundations and other organizations
Grantmakers of Oregon & SW Washington - provides links to most local foundations that have websites.
Local Opportunities:
Individual Development Accounts or IDA’s are an innovative matched savings program to help low-income Oregonians gain greater financial security. Participants in the IDA Program set an asset goal (such as purchasing a home or starting a small business), attend financial education and asset specific classes, and consistently set money aside to achieve their savings goals. Once the savings goal is met, the savings are matched by state funds.
IDA participants who are saving to start a business must complete a business training class and write a business plan. Both requirements are fulfilled in the MERIT program! We partner with Salem Keizer CDC, Salem Housing Authority, Polk CDC and Juntos Podemos to provide business IDAs. For more information, contact our program director Forrest Peck at forrest.peck@chemeketa.edu , or see the Oregon IDA program website: http://ida.neighborhoodpartnerships.org/participants
State and Regional Programs:
Oregon Arts Commission Grant Programs
The Arts Commission offers several grants to local artists. Individual Artist Fellowship grants are available for Oregon’s “most innovative creators.” Career Opportunity Grants are awarded several times per year and enable artists to take advantage of a unique opportunity to enhance their career by developing arts, business or professional skills to increase the marketing capacity or quality of their artwork. There are also grants available throughout the year for artists involved in community development, cultural tourism, teaching art, and media arts.
Oregon Department of Agriculture Grants and Business Resources
This is a state government grant program for the most innovative research and development-driven businesses. Businesses must be recommended to the council, who then recommends them to the state government for approval.
Regional Small Business Finance Programs
MicroLoans
The Oregon MicroEnterprise Network (OMEN) offers a microloan program called CapitalLink, administered through its member organizations like MERIT. For more information: http://www.oregon-microbiz.org/CapitalLink.cfm.
Federal Programs:
Rural Energy for America Program
REAP offers grants, guaranteed loans, and combination grant/guaranteed loans to help agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements in rural areas. Click here to read an interview with a USDA Rural Development grant writer about this program: http://www.cleanenergyresourceteams.org/get-answers/24/03/2009/tapping-usda-rural-energy-america-program
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) Programs
SBIR and SBTT are highly competititive programs that award grants to small businesses engaging in cutting edge, high tech research and development. The SBTT is for businesses who partner with a non-profit research institution. These programs are administered by 11 federal departments. To apply, search at grants.gov.
The VAPG program provides grants to individual producers and groups of producers who add value to their agricultural product through further processing. The program is designed to encourage independent producers of agricultural commodities to process their raw products into marketable goods, thereby increasing farm income.
Using Credit Cards to Finance Your Start-Up
According to the Ewing Marion Kauffman Foundation, credit card debt increases the likelihood of new business failure within the first 3 years in business. For every $1,000 increase in credit card debt, the likelihood of new business survival falls by 2.2%.
The use of credit card debt is not the only factor that affects business stability; however, many new businesses have limited access to resources including formal credit markets. Consequently, entrepreneurs often turn to credit card debt to finance their new ventures. Credit cards are an expensive way to fund a business, and this new study suggests that reliance on this type of financing may affect financial stability and survival.
For more information: http://www.kauffman.org/uploadedFiles/kfs_credit_card_debt_report.pdf
The MERIT program is a part of the Chemeketa Small Business Development Center.
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