FREE MONEY! What a great concept! You know what happens. You hear about someone giving money away. For FREE. Suddenly, that wish list in the back of your mind rockets to the front. "Just think of all the stuff I need and can now get".
Let me tell you a couple of stories from my files to bring you back to reality.
FEMA Grant story: A VA department was approved for a grant to buy a new truck. By the time they actually received the grant, the truck cost had increased over $40,000. Plus the department was expected to pay for their 10% share. All in all, they needed to get almost $70,000 to get the free money.
The problem was that they didn't have it. And FEMA rules prohibited pledging the truck to get a loan for the $70,000. And they couldn't get approved based on their older apparatus.
State Loan story: Illinois has a wonderful 0% loan program. You pay the loan back over 20 years - interest free.
The problem is that the loans are very hard to get. The maximum loan amount is $250,000. You have to figure out how to pay for the rest of the apparatus without using the new apparatus as collateral. One department had to pledge their station (which they owned debt-free) to buy the new apparatus. That is a classic bad financial move - it's called reincumberance and it means you use something you already paid for and owne to buy something else.
In Summary: Research all the facts and know all the details when you pursue free money. The requirements can sometimes be very costly or, worst case, prevent you from getting the money. Do your homework, ask the right questions, and have a complete plan in place before you apply.
Stay safe!
John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com
Wednesday, June 3, 2009
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