Grants and Subsidies: Money You Don't Have to Repay
The appeal of grants as a form of startup funding is quite noticeable, because the money businesses are offered does not have to be repaid as long as specific goals are met. The fact is that the criteria for being awarded a grant are likely to be strict, so the vast majority of startups are awarded a trivial amount rather than enough to fully fund their business for quite a few years. There are lots of grants available to encourage research and development activities, and specific capital allowances for businesses that carry out R&D. The registration process can be competitive and time-consuming. Small business grants are scarce and highly difficult to get because of the number of people that can apply.
Aside from the requirements of the organization awarding the grant, three other factors may affect your eligibility. A good business plan is one of the critical pieces; do not think twice about it, and include it in the grant application. It gives the reviewers clear information about the mission and prospects of your business. The content of your application must align with the vision and purpose of the organization that awards the grants. If the organization's vision is to encourage entrepreneurship in undeveloped communities, then your application must carefully reflect those things. And it is imperative to write a professional and well-written application, with all the necessary data and documents backing every detail, which can be key to obtaining endorsements.
The types: government grants for small business, funded by government or by non-government entities, such as Grants.gov and EPA Grants. Corporate business grants, offered by corporations such as FedEx, Walmart Foundation and Wells Fargo, which are highly competitive or focused on specific industries. Business grants for women, since statistics from the loan market show that women are much less likely to obtain regular loans for their businesses; examples are the Amber Grants and the InnovateHer Challenge. And business grants for minorities, such as the Minority Business Development Agency and the First Nations Development Institute Grants.
A subsidy is a benefit that arises from payments and tax breaks awarded by government bodies to organizations or individuals for their contributions to the public. It eases the burden of the recipients and supports them financially in accomplishing their goals. A direct subsidy is the actual payment of funds to the recipient. Indirect subsidies are not funds, but come in the form of a reduction in taxes and government-supported services.