Smart Answers

Q: I'm a single mother of four, and after 20 years in business, I'd like to expand. I'm trying to find a grant. Where can I apply? -- M.G.S., Glenwood, Iowa

A: The idea of free money is just a myth. Unless you are starting a nonprofit entity or have a rich uncle, you'll have to repay investors--with interest. But you could qualify for a low-interest loan. For starters, investigate micro-loan programs, generally for small, undercapitalized businesses that need $25,000 or less. Repayment ranges from three months to three years. Call your city's economic development department. "Local governments are forming micro-loan centers, where the banking interests put money into a trust fund aimed at helping small businesses grow," says Ron Wohl, spokesman for the American Association of Home-Based Businesses. Or ask your bank about the U.S. Small Business Administration's 7(a) Loan Guaranty Program. "We guaranteed 43,600 loans through conventional lenders in fiscal year 1999," says SBA spokesman Mike Stamler ( or 800 U-ASK-SBA).

Other possibilities: Take out a home equity loan or use credit cards to buy equipment and inventory. Or consider a factoring service. They'll buy your receivables at a 4% to 9% discount and then collect the full sum owed by your clients.

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