The late-night TV infomercial is so alluring: "Come to our seminar and find out how you are able to get your authorities grant to start off a little company!" a breathless announcer intones. "Just $300." A smiling entrepreneur assures in a taped testimonial: "I got $40,000 for my tiny company!"

The bright, red words: "Free Money!" fill the screen. It's an old story, and one that makes small-business consultants, counselors, and advice columnists (this a single included) cringe. Whenever such ads run, we brace ourselves for calls and e-mail from entrepreneurs and would-be business owners who can't wait to get their hands on that cost-free federal government cash - which does not exist. Why are folks who supposedly wish to be hard-headed, no-nonsense enterprise sorts so gullible? This is really a subject the Smart Answers column has addressed before, but I periodically revisit it. That's because these aren't harmless hoaxes. Seminar sellers and ebook hucksters routinely con men and women into shelling out hundreds of dollars to hear lectures or purchase directories that contain data readily offered (yes, actually for free!) in any public library or on the internet.

"I've been working in small-business advancement for 16 years, and this urban legend by no means goes away," sighs John Rooney, a professor on the Lloyd Greif Center for Entrepreneurial Studies on the University of Southern California. "Interest and calls peak when some new ebook or ad kicks in."

"BRIGHTEST TECH MINDS." Widespread sense along with the most fundamental awareness of organization principles must tell business owners that no one besides Mom and Dad (maybe) will give you no-strings funds to start off a for-profit organization. "If the government was within the position of providing all of the funds totally free to people who start off their own enterprises, we wouldn't last long," says Mike Stamler, a spokesman for the U.S. Little Business Administration in Washington, D.C. "Not to mention that the American men and women would in no way stand for the federal government setting people up in organization at no cost, and all at taxpayer risk."

Yet, the myth persists. Like most con artists, the free-money hucksters take a grain of truth and distort it. You will find a few highly particular grants for tiny companies. A look in the details shows the funds is hardly cost-free. It comes with a host of restrictions and quid pro quos. For instance, some local agencies give smaller grants to organizations that locate in poor areas and guarantee jobs to people in an underemployed community, says Phil Borden, director from the Women's Enterprise Advancement Corp., a Lengthy Beach (Calif.) nonprofit business enterprise assistance center.

You'll find also some really restrictive, difficult-to-obtain grants given to modest corporations to investigation new technologies for the govt. "There is something called the Modest Business Innovative Study (SBIR) program that gives business owners up to $100,000 to analysis an concept that's considered promising and as much as $1 million to create products from it, if the investigation pans out," Borden explains. "The dilemma is, the promising ideas need to do with things like how you can capture a satellite in orbit and repair it. The men and women who compete with intricate, detailed proposals for these grants are experts in engineering and science and have the brightest technology minds in the country. The notion that this type of cash is obtainable to folks off the street is really a joke."

Ready VICTIMS. Still, the free-money hucksters locate prepared victims simply because individuals wish to believe there's a way around the difficult work of raising capital. "So numerous people say they heard it from a friend or saw it on TV. Of course, they've by no means truly met anyone who got any free of charge cash. It becomes like the Holy Grail of small organization, and loads of business owners get caught up in this strategy that it is out there," Rooney says.

The true believers are amazingly persistent. "About six or eight years ago, there was a scam like this that produced a run of calls," says the SBA's Stamler. "The huckster in the heart of it implied that these grants were there, but the federal government didn't desire to let everyone know about them," Stamler recalls. "He told folks to not take 'no' for an answer when they referred to as us."

Rooney says he once ordered a "free-money" e-book advertised on television.The author claimed every single entrepreneur was entitled to a govt grant. Rooney received a directory of farmer's subsidies, Housing & Urban Improvement programs, and government-loan applications.

What about those testimonials from happy business owners? Listen closely, Stamler says. They usually say they "got" so much federal government money for their modest organization - they don't say how. Most of those featured entrepreneurs have gotten small-business loans, he says. The SBA guaranteed more than $16 billion in loans during fiscal 1999 through its three major financing programs.

LEGITIMATE SOURCES. The irony is that in this boom time for modest organization, there are several sources of loans or equity financing for startups. "Money's not that challenging to get from friends and family if you've got a seriously good notion," says Rooney. "I've seen college students raise millions with their dot.com ideas. Why waste your time with the snake-oil salesmen when you could be talking to professionals who know what they're doing?" After all, it's not as though the average startup needs a lot of millions to get off the ground.

As Jim Weidman, spokesman for the National Federation of Independent Enterprise points out: "Most new organizations are started with a incredibly tiny amount of income, around $5,000. So men and women come up with it out of their personal savings or borrowing from their relatives, unless they are buying an ongoing enterprise or starting a organization that needs lots of initial funding for inventory, working capital, or buying or leasing a building."

You can maintain your blog by logging in to your Bravenet account. Once you are logged in you can customize the layout, colors, and features. In addition, you can add your own links, edit your profile, add your friends, and change many other options to personalize your blog.

Once you begin using your blog, you can view statistics in your members area to see how many people are reading your blog as well as where they come from.

We hope you enjoy your Blog. Be sure to tell all your friends about this great new service from Bravenet!