It turns out that small-business grants and interest-free loans for female and minority new business owners are right up there with Santa Claus and the Easter Bunny; all lovably fun and widespread stories known by many with absolutely no truth behind them. (I am truly sorry if I just burst several bubbles at once for you.) The SBA and other Small Business Development Centers provide technical assistance, loan information, and standard loans, but unfortunately, few hand out no-strings-attached cash to help business owners get started.
Read the full article here: Busting the 'Free Money' Myth
Don't give up hope, however, because once you get your business up and running, then you can use your small-business designations to qualify for various contracts that are specific set-asides. For example, GSA just recently issued the 21-Gun Salute initiative to help service-disabled veteran-owned small businesses (SDVOSBs) by increasing the amount of agency contracting dollars going to these businesses. GSA has failed to reach the goal of 3% of contracting dollars to SDVOSBs in both 2006 and 2007 and is now pushing to achieve those numbers this year. (For more information on this initiative, read the full article here: GSA launches new initiative to help veterans.) As there are government goals in place for each type of small business designation, there are plenty of ways to into contracting, starting by monitoring FedBizOpps or getting in touch with the Office of Small and Disadvantaged Business Utilization at the agencies with which you wish to work.
Many commercial companies also need to work with small businesses to fulfill subcontracting goals, so there are also plenty of opportunities to be found to help small business owners succeed outside of working directly with government agencies.