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Free cash for a minority startup?
Dear Small Biz Adviser:
I have heard there is "free money" for minority women
to establish a business; is this true?
Monica
Dear Monica:
Over the years, I have responded to many inquiries regarding free
money, but yours brings an added ingredient of the business owner's
gender and ethnicity.
Let me begin by stating unequivocally that I have
never accepted the concept that money is free for anything, including
the starting of a business. Strings are always attached with money,
be it repayment, interest expenses or the fulfillment of precise
milestones established by the money source.
No free money, but free government
assistance
The University of Wisconsin at Green Bay Small
Business Development Center has a very good Web site that explains
the availability of "free money," small business options
and federal government involvement.
Basically, there is no such thing as free cash from
the U.S. government to start a business. The site does, however,
provide hyperlinks to 50 programs that assist such efforts. Examples
include:
Other government programs
In addition to SBA programs, the federal government offers other
assistance to new, small and economically disadvantaged companies,
including:
- The Welfare-to-Work
tax credit allows you to hire long-term welfare recipients
for a credit against company income taxes.
- The Work Opportunity tax credit gives employers a credit against federal income taxes for hiring individuals identified under eight specific
socioeconomic categories.
- Workforce
Development Boards throughout the country offer employer incentives,
including wage tax credits, on-the-job training reimbursements
and, in certain states, sales tax refunds from the purchase of
building materials and office equipment.
Don't overlook state resources. Check out the state
Web site directory for your state's and local governments' small-,
minority- and disadvantaged-business assistance programs.
Finally, I must reiterate that money is not free to
start a business. There are no grants that simply finance the operating
expenses of startup and existing companies.
But don't let this discourage you. Every successful
business started without free money, just as will be your case.
If you have the right tangible and intangible elements required
of all successful entrepreneurs, it is a matter of time, hard work
and recognizing opportunities when they arise.
I wish you well.
-- Posted: March 28, 2002
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