Small Business Financing

About 1.5 years ago I was looking for ways to get some financing for my company other than a bank load or venture funding.  One area I was researching was grants.   Grants are gifts from nonprofit foundations (which can include government organizations and private foundations) that are typically made for a particular purpose that fits within the mission of the foundation.  Because a nonprofit needs to meet certain IRS guidelines to maintain their tax free status, they need to give money away annually.

I found a company called National Growth Funding, which is out of San Antonio, Tx.   They said there was some $500 billion in grant money available in 2015, $30 billion for small business and $9 billion for entrepreneurs.  The grant money was available for business start-up, expansions, etc.  I looked at their BBB rating (see another post on this), and it was an A.  After discussing my business and a particular angle for a grant, I decided to have them write a grant proposal.  I did negotiate their initial fee way down and I felt like it was worth the risk for the fee involved.

 

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The process started off slow.  I called several times. I was always able to talk to someone, so that gave me some assurance, but the process moved like molasses.  I finally got a grant proposal after about 3 months.  The first draft was poorly written.  It was faxed to me.  Who uses faxes in an edit process anymore?   Anyway, I make a complete re-write, emailed it back, and we went back and forth like this through several iterations.

I got copied on a few letters to some of the foundations.  No responses.  I followed up, they sent more letters.  No responses.  Finally I called and talked to my account rep Daniel Baca and he said he would have someone else call to follow-up.   Joe Armstrong then called back.  He said he was the guy that did the big dollar grants, and that really, in order to get a grant, I needed to create a non-profit company, have that company write the grant request, and then use that money to fund the grant mission via my other company.   He said foundations like giving to other foundations and non-profits because it is a a lot less risky.  It kind of made sense, however, he wanted another $10,000 plus to create the entity, get the tax exempt status, etc.

I didn’t do it.  Needless to say, nothing else has ever happened.  I just recently checked out what was happening with National Growth Funding, and it looks like they have shut their doors.

So, I got duped.   I knew going into it that there was a risk nothing would ever come out of this, and I was willing to gamble with the small initial fee.  But I have learned a valuable lesson.

 

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1. If it sounds too good to be true, it probably is.  They made it sound pretty easy and highly likely I could get a grant.

2. If ANYTHING seems a little fishy about the “who” or the “what” you are dealing with…run.  In hindsight, the whole edit process of the grant seemed really strange to me, however, I didn’t know this until after I paid them some money.  Also, people did not have a real email from the company.  They were using email addresses from Yahoo.  Any reputable company should have its own branded email.  This is a basic MUST Have today.  If you do not know how to get one, I can help you do it.

3. Do the work yourself.  There still might be grants out there.  You can find federal grants at grants.gov.  There are other sources as well.

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