Recession is the time of innovation but it is also hard to find funding during these times.  But with a little research on the internet your small business can quality for grants from the city, county, state, and federal governments as well as private foundations and corporations.

1. Figure out if you qualify for any special small business certifications, such as a minority-owned, disadvantaged, woman-owned or veteran-owned business. Federal and state governments sometimes give priority for grants to these types of business owners.
2. Then look at your local government Web sites — for your city, county and state — and find the economic development agency or area equivalent.
3. Next, sign up at grants.gov to receive information about specific kinds of federal grants.

Keep an open mind while doing your research.  Who knows you might be one of the business owners who just might modify their business based on funding opportunities

BusinessWeek says, “Few entrepreneurs consider bonds when they need major long-term financing. But by using a little-known set-aside in the public finance world called an industrial development bond, or IDB, small companies with strong track records can gain access to as much as $10 million with rates as low as 3%—similar to what large corporations get in the commercial paper market. (Up-front fees range from $70,000 to $200,000, but total costs are still about 20% to 30% less than conventional bank loans.) And while IDBs were designed to be used specifically by small manufacturers, the definition of “manufacturer” may surprise you, as the American Recovery & Reinvestment Act expanded it to include technology companies that manufacture software or other intellectual assets.”

Since now is the time to start a business, why not consider IDBs instead of a loan?