Need a Grant For a New Business? Here’s What You Need to Know!

Starting a business of your own is always an exciting thing, especially if you have not heard of how to get a grant for new business. Most people love being their own boss. In some cases, you know you have a great business prospect. But financing it is the only problem. That is the reason most people are afraid to pursue their dreams.

But hey! Maybe there really is a way out! Did you ever think of applying for grants for your new business? Business grants are offered to those who are interested in getting started with a new and promising business. These grants aim at helping these enthusiastic entrepreneurs get started.

As opposed to typical loans, a grant is free money! Which means you won’t have to pay it back. No wonder millions of people are after new business grants! Many small business owners found such incentives truly useful. For some entrepreneurs, grants are just the ‘extra’ push they need to take off with their business.

So who offers the grant for new business?

The most prominent source of small business grants is your local government. But a number of business groups or private organizations also offer grants for entrepreneurs. As a matter of fact, the federal government does not directly offer grants. Grants are usually offered by your state’s government or various government institutions.

What do you do to obtain such grants?

For getting your hands on these grants you need to qualify in the first place. And once you’ve done that, you are entitled to apply for or achieve a reasonable amount of grant money via those respective departments of the government.

What are the key eligibility criteria?

The bottom line is that, when you want grants for your new business, you have to be 18+ (in terms of age, of course) and you must be an American citizen/legal resident to apply for a government grant in the US.

The amounts of grants sanctioned by the government can actually vary. But can be anywhere from $500 to $50,000 generally. Fortunately, when you’ve applied for a new business, this amount might well exceed what is mentioned.

Another thing worth mentioning is that you have to write a solid business proposal as part of the application process. You usually have to submit the business plan for getting the grant. It has to briefly explain how you’re planning to run your business, and how you’re planning to utilize the funds.

Your proposal generally has to answer your current financial conditions, the projected cash flow or ROI, insurance coverage, methodologies of implementing the plans and your back-up plans – just in case your business fails. If your proposal is a sound one, you should not have problem getting a grant for new business.

How to Keep Your Spouse Safe in Business

As a structuring adviser to investors and business owners we often come across a widespread mistake that many people make.

That is a spouse being offered as a guarantor to the financial institution, landlords or creditors of a business. Often their personal guarantee is even needed for the agreement to proceed yet it is given.

Why? Because the advisers do not defend you and point out that it’s not required.

The upshot is that if total business or investment collapse happens, both spouses are fully liable rather than just one. Sure, the creditor, bank or landlord asking for your spouses guarantee will explain it is necessary 100%.

This is because it is in their. Yet it is not in your interests. My advice is NEVER give your spouses guarantee in business or property transactions if you can keep away from it.

I have developed over 80 million dollars in property, and guaranteed a number of numerous business and banking obligations, purchased multiple investment properties, – and my wife has never signed a personal guarantee on the transactions. Why?

To protect her from the potential risk and obligation. How did I avoid her being liable? By saying ‘no’ to the banks and creditors when they asked. Did it interfere with her legal or matrimonial rights to recuperate the property if we separated?

No, — she still receives the assets because she jointly controls the Trusts and numerous borrowing. This is not about removing power away from your spouse and potentially wealth, it is simply to do with reducing your risk to your family.

Examples of this include:

1. Borrowing funds from a lender to buy an investment property or even your family home. If one spouse is a homemaker, has no income or their income is not required to meet debt servicing criteria of the bank, then why allow the bank to take their guarantee?

The only purpose of the guarantee will be to use more pressure to your household if you have difficulty, and both spouses go bankrupt rather than one (which may be viewed as malicious in this light).

2. Handling land-lords when it comes to commercial leases and guarantees. Ensure you attempt to divide leases out into separate ‘tenancy companies’ and make one spouse a director of this company.

Your opening position should be no personal guarantee, and if ‘no personal guarantee’ is a deal breaker with the landlord, then only the director/one spouse gives a guarantee.

Try not to give an unlimited guarantee, limit it to say XX months rent, or a fixed sum as a cap.

3. Dealing with creditors over personal guarantees. Creditors in business will normally ask for a personal guarantee.

Decline to give it if you can get away with it, and most of the time you can. Where you have to give one, just as with a landlord ‘limit the guarantee’.

In summary, protect your spouse from liability if you can help it. Personal guarantees and spouses should not go together. If you are negotiating with a landlord or creditor as a business owner and have to supply a guarantee, try not to give a guarantee at all, or limit the guarantee to a fixed sum

(Eg: 6 months rent. If your spouse has no income, you should be able to avoid their guarantee being given to a lender/bank)

Try using a mortgage broker to achieve this. Usually the banks (if dealing direct) will be very difficult to manage on this issue, especially in this recessionary climate.