07/06/2010 05:12 am ET Updated Dec 06, 2017

Grant Scams Abound -- But There Are Billions Available From The Federal Government for Technical Research and Development


Small-business owners are falling prey to scammers who are ripping off fees without delivering the services promised. These desperate entrepreneurs are being told there is free money available if they know where to look for it and know how to get it.

"GIA Business Grant Fund," was in the subject line of SCORE's e-mail blast.

"Client received a letter stating that she could have grant money if she paid an acceptance fee of $199.95," posted Jeannette Watling-Mills, businesswomen and SCORE volunteer. "It sure sounds like a scam to me."

"How do I get grants?" ranks as No. 1 among the most frequently asked questions from my SCORE small-business clients. SCORE is a nonprofit resource partner of the U.S. Small Business Administration. It offers free mentoring and inexpensive workshops to help entrepreneurs start, expand, and finance small businesses. SCORE has more than 11,200 volunteer business mentors in 370 chapters nationwide.

SCORE mentor and financial advisor Werner Knoop responded to Watling-Mills' e-mail asserting that it is not wise to pay up-front fees. "This would be money down the drain ― in my opinion!"

Ken Chapman added, "I get serious red flags on this one." He is a lawyer and also a SCORE volunteer. "I would not send dollars without confirmation directly from SBA."

But SBA's web site says, "Note that the U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs." It goes on to say that its grants are to nonprofit organizations that help the agency further its mission.

An exception is federal agency grants for technical research and development.

SBA's Small Business Innovation Research and Small Business Technology Transfer Research programs offer grants directly to qualifying small businesses. That is why the agency and its resource partners sponsor educational programs about how you can get SBIR and STTD grants.

More specifically, the 12th Annual NIH National SBIR/STTR Conference will be held on June 2 and 3 in Raleigh, North Carolina. It is an opportunity to learn how the programs work and meet with the government's decision makers.

SBA resource partner, Small Business and Technology Development Center of North Carolina and the National Institute of Health, a federal agency, are co-sponsoring the event. John Ujvari, SBTDC's program specialist says that billions of grant dollars are available from federal agencies and NIH is currently offering "over $690 million available this year for SBIR and STTR." He also says, "The new Raleigh Convention Center will offer a terrific venue for this engaging and informative conference."

Moreover, he says that both novices and experienced attendees will benefit. "The information presented here will be invaluable."

Phase I of SBIR and STTR grants provide up to $150,000 to do a feasibility analysis of your concept. If the government accepts your idea, Phase II awards can be up to $1 million to undertake and validate your research.

Conference speakers will talk about the application process and give examples of small businesses that have won grants in the past. Additionally, you will have an opportunity to meet with NIH representatives and previous grant recipients to learn the keys to their success.

You can more about the conference and register online or call (919) 715-7272.

You can contact Ujvari by e-mail,, or by phone (919) 962-8297. Ask to be put on his mailing list for newsletters and upcoming events.

Yes, there are federal grants available to for-profit companies. But they are mostly limited to technical research and knowing which federal agencies need what you have to offer.

Jerry Chautin is a volunteer SCORE business counselor, business columnist and SBA's 2006 national "Journalist of the Year" award winner. He is a former entrepreneur, commercial mortgage banker, commercial real estate dealmaker and business lender. You can follow him at