Many people want to enjoy the feeling of starting their own business one day because they get lured by the feeling of generating immediate profits by using their innovative inventions and ideas. The following misconceptions that new business owners might have:
- Myth 1: The government offers scholarships / grants for startups.
Reality: There are no programs in place with the government that lend money directly to any business. Though some bodies or state governments may have special programs in place that offer grants, they may be an important source of funds for people with disabilities or veterans or minorities. These special programs have a specific set of requirements that must be fulfilled in order to be eligible for the same.
- Myth 2: The SBA loans money directly to small businesses.
Reality: The SBA helps in facilitating finances through a network of lending partners, which include local banks and community development organizations but they themselves do not lend money to businesses. As an independent agency with the executive branch of the government that deals in arranging for loans to small businesses, the SBA is the guarantor of three different loan programs that directly benefit small-business owners. They are the 7(a) loan program, the 504 loan program and the microloan, or 7(m) loan program.