So you have a great invention, and you want to license it to prospective clients, or even start a business around it and the innovation that created it. The only thing standing in your way is a small matter of finances. Many great inventions are never capitalized upon because of a funding crisis of one sort or another. There are some ways to get that funding you need, and make sure that you use it wisely.

There are many avenues available to the inventor to get outside funding for their invention, however many of these funding opportunities are not for everyone. Searching around on the net will tell you that there are a variety of programs specifically designed to finance innovation, but which funding method is best for you? There are SBIR (Small Business Innovative Research) type programs, funding for small business through the SBA (Small Business Administration), and venture capitalists, just to name a few. These are the most common avenues an inventor spends time pursuing, so let's narrow that down a little bit. The independent inventor is rarely eligible for, or otherwise able to obtain funding from any of these programs or funding opportunities, plain and simple. How's that for narrow?

Independent inventors will have a very difficult time obtaining SBIR or SBA funding for several reasons. There are many myths about these programs that simply do not prove to be true. Inventors are often misled, sometimes by wishful thinking, by the descriptions on these programs. They find when requesting funding that the criteria may be unattainable for them.

SBIR programs are based on solicitation for proposals from inventors, small business and so on. Different government organizations such as the Department of Energy, The Department of Agriculture, and of course the military branches of service as well, solicit proposals around a specific area. The Navy may ask for different types of autonomous underwater vehicles, to crawl, swim, look, listen, and whatever else you can think of. (Actual Naval solicitation called for these exact projects in 2003) It's up to you, and your team to put together a solicitation that these people will throw money at, is what it boils down to. If you can do it, you'll get the funding. If not, you have wasted much time, money and effort so determine if you are able to properly execute the proposal before you file it.

Some of the usual requirements include, a management team, at least one Ph.D level researcher dedicating so many hours per cycle (payment dispersal period) to the effort, accurate and audited budgets current and projected, etc.

Knowing is actually half the battle in the this game, if you are unable to execute a proposal, do not file it. Think of it as making a vow to the Almighty or the equivalent. For each of the proposals that is excepted, the government organization expects a certain schedule of statements to be provided to them, detailing the progress of your research. If you assure one of these organizations you will execute a proposal, you had better follow through with exactly the guidelines they give you if you want your funding to continue.

Independent inventors are not usually equipped with well funded labs, nor access to these types of facilities, or the Ph.Ds that would run one at the local University. If you are an inventor and a Ph.D, great! If you happen to know one that will work with you on some projects, that's even better. Many inventors do not have these luxuries however, and therefore cannot do the type of research and development necessary to accomplish funding through the SBIR programs.

Independent inventors are not used to dealing with direct pressure from the Federal government for immediate results. Many inventors also find the record keeping, auditing, and other requirements to be a logistics nightmare. This is precisely the reason for the requirement of a management team. The SBIR may not, and actually is probably not for you.

What about the SBA? People often misunderstand what is considered a small business. For the SBA, it's "500 employees for most manufacturing and mining industries, 100 employees for all wholesale trade, industries, $6 million for most retail and service industries, $28.5 million for most general & heavy construction industries, $12 million for all special trade contractors, and $0.75 million for most agricultural industries" Now although those are maximum numbers, that may seem a little large for the small business many independent inventors are thinking about. Many inventors think a small business should be a phone and a desk, and perhaps they are right. The SBA does offer some micro business funding, the point however is that the average inventor, home business owner, or even micro business owner is not the targeted receiver of SBA funding. They have recently begun to use the term "micro business" to describe these type of businesses, however there is not yet a Micro Business Administration.

It is possible to obtain funding through the SBA for your micro business, however if you qualify for it you are an individual of above average means already. In order to qualify for a loan through the SBA, you need to have a very solid credit history and great scores. This needless to say is not the credit situation where many independent inventors find themselves. In addition, you are applying for the loan through the local bank that has been distributed the SBAs funds to loan out. The local US Bank for example is an authorized loan agent for the SBA, so think about it as getting a bank loan because that's what it is. If you cannot get a bank loan, you will not get a loan from the SBA.

If you qualify for a bank loan, you may consider using it instead of SBA funding. The SBA has stringent requirements like the SBIR programs about reporting, management teams, etc. so you might be better off with a bank. You must of course prepare a solid business plan for either of these funding opportunities. The determining factor will usually be the interest rate.

Venture Capitalists are probably not your answer either. Many times they are more invasive of your research and your company than the bank or the SBA would ever consider being. Since an "Angel Investor" has put up the majority of your money, they somehow figure that they deserve a majority of the profits, and they will watch and interfere with you accordingly.

So what is the answer, where does the independent inventor obtain funding for their invention? Well, it may surprise you that there is a lender out there who is pretty easy to convince. Since the lender has known of your invention, the lender has talked of nothing else. The lender's every waking moment is dedicated to your cause. Who is this gung-ho financier? IT'S YOU! Yeah, you the independent inventor. That's right... You. Think about it. You are already convinced, right? You will not turn you down. You will not require good credit, daily reporting, or a business plan.

How does one go about lending to themselves, is a familiar question. Do you buy a morning latte for $4.87? If so donate it to the cause. In just 7 days that morning latte you gave to you fund has brought you a grand total of $34.09. Do you subscribe to cable or satellite TV? How about extra movie channels? Consider donating them to the cause. The amounts vary drastically, but they do add up. On a monthly basis, when you pay your bill, take the amount you had been putting on those services you gave up, and donate it to your fund. How about cigarettes? At an average of $4 a pack, a two pack a day smoker can put as much as $248 a month into their invention by quitting entirely. But by cutting consumption to one pack a day, you can still save $124 for your inventive exploits. Change your own oil, dine from the dollar menu or learn to love 68 cent bread as a staple, spend less money. A penny saved, is a penny put toward your invention! You will be surprised how much money you can lend to yourself if you are willing to sacrifice your lifestyle. All this sacrifice isn't worth much though if it winds up being spent on something else.

You might consider working more hours, or finding a second or third job. I would not recommend this for families of course, as family time is both important and hard to come by as it is. Single folks however are more than welcome to take on whatever they can handle. With all that time spent working, you will have difficulty finding time to spend all that hard earned money. Your goals will be achieved more rapidly.

Just like anything else that has to do with money, you need to know where it's going, why it's being spent, and so on. The best way to do that is that evil 'B' word, budget. Without a budget, you'll have a very hard time running a successful business. Without a budget, you may over estimate, or worst of all, underestimate the cost of getting your invention to the marketplace. Budgeting is pretty simple to do, and can be done in just a few minutes a day for the independent inventor, or small company owner. Basically the whole idea is, don't spend more than you have. This is more complicated than it sounds, but it can be done.

Line out your bills, then your income, and cut off anything you don't need. If you don't have enough money to pay the bills, even for only basic needs, you will need to increase your income. If you have debts, try paying off the smallest ones first, then putting the payments you would have made on those debts toward the next biggest debt, until you have all the combined payments from your debts free and clear, ready to be invested in your invention. This debt reduction practice is called the "debt snowball" by financial counselor Dave Ramsey, and that's exactly what it is. By paying off the smallest debts first, you are able to see immediate success and experience immediate leverage in paying off your next smallest debt.

Last but not least, let's remember that we will need less money to accomplish our goals if we are able to do a great deal of the work ourselves. You can save thousands of dollars by patenting yourself. The same goes for prototypes, or modeling, or anything else invention related. You will save money if you do it yourself. The only exception to this is an independent inventor who's current business or job pays them more than they are saving for the amount of time spend on it. If your not one of these people, and seem to find much more time than money on your hands, I encourage you to give it a shot. If you find something too complicated, don't fear, there are always people who will help you, for a fee. You'll just need to add that to your budget. If you balance all of this correctly, you will find exactly the financing you need to bring your invention to the world, where we all look forward to seeing it.