Tweet

Free Money to Pay Your Bills? Not Quite

Written by: Donovan Wadholm

Article Overview: Looking for free money? Government grants? The silver bullet to get your business launched? Find out if the mythical pile of money is just waiting for you to claim it...right after your buy this book.

Free Money to Pay Your Bills? Not Quite

Matthew Lesko is my nemesis.

You know the crazy guy on late night infomercials prancing around in his question mark suit screaming about “Free” money to pay your bills…or to buy something…or to start a business?

For years now this guy has made a fortune selling publications that are full of information that is free and available to the public. There is nothing inherently wrong with charging for the convenience and reprinting cost of information that would have taken considerable time to gather and publish…that is not where I take issue.


In fact, there is no problem with telling people that there is grants, direct payments and assistance programs available for everything from paying your heating bill to starting a business…however slim the chances are of you getting any of them.

The problem is the tricky semantics he uses to make you think there is a lot of free money or grants out there.

For example a classic Lesko line is:

(Holding up a piece of paper) “Here…answer 15 questions and get a $4000 grant to fix up your home! Or fill out one page and get $150,000 to start a business.”

To the common person you might believe that the $150,000 is in the form of a grant because the proceeding program he spoke of was a grant. The fact is the document he is holding up is for an SBA guarantee on a small business loan…which is not a grant at all…it’s not even a low interest rate loan. But…if you read what he said carefully you will realize that he didn’t say it was a grant or even free money. He simply said that you can get $150,000 to start a business with that document…and that’s true IF you can find a bank to finance you and IF you have a business plan and IF you have a down payment and collateral, etc…

Need another example?

OK…his Free Government Money for Business website he lists among hundreds of other claims: “75,000 to create a job in North Dakota.”

Well I just happen to live in the Great State of North Dakota and I assure you there is no program that will give you $75,000 to create one job. There is however a program run by the Bank of North Dakota called Partnership in Assisting Community Expansion (PACE).

The PACE buy down is a grant. However, the grant money is used to reduce the interest rate of a loan you borrow up to 5 percentage points. The grant money comes partially from the Bank of North Dakota and the job creation Lesko is referring to is as follows: The borrower shall demonstrate that within one year, there will be a minimum of one job created and retained for every $75,000 of total loan proceeds.

But there are other requirements that must be met. 35% of the interest buy down money must be raised from a local Economic Development Group and they may have requirements of their own. For example minimum job creation requirement such as 50 or more jobs. In addition, the business has to be primary sector with more than 75% of their sales coming from out of state. Finally the job have to be created in specific industries such as manufacturing or value added processing. And all of this is predicated on getting a big loan in the first place…which is definitely not free money.

So you see the program is much more complicated than getting $75,000 to create a job in North Dakota.

So lesson #1 is to realized that not everything he talks about is free money. in fact according to Lesko’s own blog response to a detractor:

If your reporting ever did take you to one of our workshops or if you spoke with anyone who ever attended one of our workshops, you would learn that we never make promises about any government money being available to an individual or organization. The only thing we do promise is that if you are unsatisfied with one of our products you can return it for a refund.

So what are they offering…I will try to cover that in Part 2

Good Luck
Mr. BizPlan

Related Articles
  Are You The Guy Who
  9.3.4 Commercial banks: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  Saving Money on your Monthly Bills
  Residual Income Opportunities- Get Paid on Bills in Canada with Mark Eichorn
  Making Your Money Work for You

Article Tags: assistance programs, business plan, business website, collateral, common person, crazy guy, direct payments, free government money, free money, late night, low interest rate loan, matthew lesko, nemesis, night infomercials, piece of paper, question mark, sba guarantee, semantics, small business loan, state of north dakota



Related Forum Posts
Re: Which would you start: a Blog or Online Community? - It is a difficult decision to make. Lets start it this way - What are you more interested in? Money? or Friends? or Both? If its purely Money, then Blog might be an appropriate answer. But consider this - It will be people (visitors) that will bring traffic to your blog and then Money will follow. This will be possible after a time and during this time it will be your friends who will be the starters. If you are looking for friends only, then its true that not many will be interested in knowing how you have beaten them in the game or the other way round. So it will be preferable to have a Forum where they can share ideas with you and others. But you can share your insider knowledge with them and invite comments from your Blog. You can also put up information on what others (including your friends) don't know about Tennis. The blog you create can provide News, Inside Information and also Techniques that can be used by the new entrants in the world of Tennis.
Making Money in 2011 - Hello forum members! As we draw closer to the new year I thought it would be appropriate to change the title of our forum category "Making Money in 2010" to "Making Money in 2011" - I'm looking forward to some interesting discussions and wish everyone a prosperous New Year!
QuickBooks vs. Microsoft Money vs....? - I have always used Microsoft Money to run my business - accounting, invoicing, etc. It came with my computer when I got it and integrated well with my online banking system so everything is a breeze. It only takes 30-60 minutes every quarter to do the bookkeeping (keep in mind that I have a very simple business - no inventory, very little invoicing, I do all my payments by credit card, etc). Is QuickBooks or Money the best accounting tool for small business owners? Or is there something even better?
Re: Free elecrtricity generator - Can anybody help me with any aspect of my invention? In basic terms it is the energy of Gravity conserved and reused = (Auto engaging and disengaging shafts) = perpetual motion Perpetual motion + static friction generated in a pipe = free static electricity Free static electricity converted to usable electricity = Free usable electricity Free usable electricity generated by the constant friction generated by an auto engaging and disengaging machine that conserves the energy of gravity in a overcrankable clock spring The weight is easilly lifted back up the shaft with the aid of a double pully on ropes
Re: What or Who Sparks Your Business Interest - It's interesting to see what the different motivations are by Age Category. I've noticed this around me: 20 to 29yr olds: Motivator: Money 30 to 39yr olds: Motivator: Success/Ambition 40 to 49yr olds: Motivator: Family comes first 50 to 59yr olds: Motivator: Leaving a legacy i've only gone that far in my analysis. Of course this is a braid generalization but I find that it helps direct my marketing to individuals in different age brackets. The product/service can be the same but the Marketing message (Benefit Statement) to a 20 year will revolve around "Money" vs. a 30-something would be on their "Self Image"


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What is the bottom line to you?

Do You Pretend To Listen To People?

Join Conversations Politely, Part 1

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.