Santa doesn't wear red, white and blue.

As those of you who follow this blog know, I get a lot of my column ideas from questions people are asking in emails, and there are a lot of questions about finding start-up capital. 

This past week, there's been a new twist on an old question.  The question is basically "can I get the government to fund my start-up".  Last week it was centered on Section 8(a) business development funding.

I would refer anyone looking for government grants for any kind of start up to the first sentence on the SBA website.

It reads: "SBA does NOT provide grants for starting and expanding a business."

It's hard to see how that could be any plainer, but apparently, some people think Section 8a funds are different.

First of all, this funding apparatus is for EXISTING businesses that have been in business at least three (3) years.

Second, the qualifications are not an "either-or" requirement. You must be BOTH socially and economically disadvantaged.

Third, this funding is for existing businesses that the government deems to be "small" businesses.

They make the determination, so what size you think your business might be is of no importance to them at all

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Although the SBA is business-centric, nonprofits will find that the "three-years-in-business" qualifier is pretty standard even in the philanthropic arena.

There are tried and true ways for new businesses and nonprofits to raise money, but sorry, grants aren't one of the ways.

Almost all new business funding is in the form of one-to-one investors or donors.  It might be from venture capital, where you give up a share of your business in exchange for funding, or from a few major donors or supporters, or from friends and family, but grants…no.

If you are interested in Section 8(a) funding and can meet the basic qualifications, then of course go for it.

Like all SBA or any other types of government funding, there are many hoops to jump through, but if you can qualify, then go for it. Just remember, true government grants are usually focused on the research and technology transfer fields, so be sure you fit into one of those areas before you spend any money or time to apply. 

How does the Washington drama affect government grants?

In the short term the U.S. government is a non-functioning entity, rather more so than usual. Due to the debt limit/shutdown situation, if you go to most of their websites you will get a message saying the website is not being maintained due to the shutdown.

Grants.gov is still displaying, but a highlighted post from their blog indicates there could be problems due to staffing shortfalls in various departments. Of course, appropriations are still to be decided, so that may cause some funding changes when the current shutdown is resolved. Some current funding may be held up as well.

Whenever there is a potential disruption in the free flow of money from Washington, some pundit opines that this will be the end of some or all Federal grant money. That sort of sounds like wishful thinking or a political attempt to add to the fear factor.

The government is not likely to end the granting programs unless we truly do go bankrupt as a nation. Grants are the way that Washington furthers its social policies. Whatever the dominant party in power, the government "gives away money" to achieve some desired goal.

Individual departments within the government are subject to the whims of the majority party. Whether  they are pushing for aid to countries outside the U.S., education, housing, healthcare, or the arts, there will be a lot of money allocated to advancing those programs. Some individual programs may be cancelled, but only because they do not fit in the current administration's scheme of things. Some programs may be moved from grant status to competitive bidding contracts.

Grants and any other kind of federal funding is somewhat dependent on the supply of money, sometimes as a high priority, and sometimes not, but throughout our history, the Feds have funneled some funds back to groups that can advance the agenda du jour.

Forecasting where that money is going to go is far more important to nonprofits in the short term than worrying about whether the supply line is going to be shut off forever. If all grants do end, that will be the least of our worries.