There are a wide variety of government programs available to help you manage your business. But let's clear up one major misconception first. The government rarely gives away grants or other forms of money to small businesses. The following discussion highlights the most common government sources of information for you.

Federal assistance

The Small Business Administration (SBA, www.sba.gov) is probably the most well known government agency for small businesses. It has a wide variety of publications available, primarily (but not exclusively) oriented towards small retail stores.

SBA offices also help subsidize offices for SCORE (Service Corp of Retired Executives, www.score.org) and ACE (Active Corp of Executives). Both SCORE and ACE volunteers tend to be executives from large companies. This means that sometimes you can get great help, but sometimes the counselors do not really understand the limitations of a small business and of having to do everything yourself.

The SBA is best known for its loan programs, almost all of which are conducted through banks and other financial intermediaries, rather than with the SBA itself. Your banker will handle the SBA paperwork, so you should ask the banker, not the SBA.

The basic 7(a) program is their main loan program. Any small business owner who uses his or her own financial resources first can apply for a loan guarantee up to 80%. While this does nothing directly for you, the guarantee against much of the potential loss can cause a bank to offer commercial loans to small businesses who are perhaps marginal when compared to the bank's usual criteria.

The LowDoc (Lower Documentation required) program is a popular loan guarantee program for loans under $100,000. A program for even smaller loans is the MicroLoan program, for business loans under $25,000 (which are generally unprofitable for many commercial banks). A variation of both of these smaller loan guarantees is called Caplines, which guarantees lines of credit. The Caplines program can guarantee up to 75% for up to $750,000.

For equipment, the SBA offers "504 loans" through Certified Development Companies (financing companies certified by the SBA). The loans can be up to $1,000,000 and up to 10 years (20 years for real estate). You must offer not only collateral and personal guarantees (as on every SBA loan), but also you must create at least one job for every $35,000, or at least retain that job. No labor-saving, job cutting efficient machinery is permitted for this type of loan if it cuts jobs.

There are also special loan programs targeted towards certain segments of the business community. The best known are DELTA (Defense Loan & Technical Assistance Program) to help small defense industry businesses, and the 8(a) loan program, where the SBA contracts directly with other government agencies, then steers the contracts to minority and women owned businesses without any bidding process. Coupled with this, minority and women owned businesses can obtain 7(j) assistance with accounting and consulting advice. There are also separate loan programs (up to $250,000) for minority owned businesses and women owned businesses.

Other agencies such as the U.S. Department of Agriculture Rural Business-Cooperative Service and the SBA International Trade Program also offer specialized loan programs. Contrary to popular myth, there are very few grants for businesses. One of the few is the program administered by the SBA Office of Technology. The grants come under a couple headings: Small Business Innovation Research Program (for a subsidy to develop a promising idea), and the Small Business Technology Transfer Program (to commercialize new ideas). Occasionally a small business can also get in on the grants typically awarded to big companies, universities and government agencies by the National Institute of Standards and Technology Advanced Technology Program. This program is administered by the U.S. Commerce Department.