Grants are an interesting and particularly attractive type of funding that any type of business owner would like to have access to. This is due to the fact that you do not have to pay back government grants.
However, grants are quite a difficulty in accessing for businesses because most times they are for specific purposes e.g. community development, SDG themed, education, renewable energy etc. If your business does not align with the theme of the grant you will most likely not be able to access it.
The United States is the template for most governments around the world. According to the US small Business administration you must go through the local and state governments or a non-profit in order to access a government grant grants from the government.
Most governments have grant institutions, these institutions would usually provide a catalog of grants, the focus of those grants and how to access them. Find the one related to your country.
Grants are not always ‘FREE MONEY’
Most times grants are not free money as they would have one clause or the other in accessing them. Some of them require a down payment, while some have require you to have previously put in a certain level of commitment to the cause for which the grant is being provided.
Can FOR-PROFIT Businesses receive government grant?
No, for-profit businesses CANNOT receive grants from the government. Grants are mainly for non-profit, non-commercial entities such as Universities, research, etc.
However, There are certain ways government grants can be useful for your business, if your business aligns with the goal of particular grant, there might be ways your business can still benefit indirectly.
Tesla as an advocate for renewable energy got a $450 million dollar loan in its earlier days which helped it set up its factories.
Talking of GRANT CLAUSES.
Tesla was required to get a location for its factory before it was granted access to the loan.
In less tha a year, Tesla repaid the loan with a $20 million profit
In other cases, customers which buy Tesla cars were also eligible for part of their money back for buying cars that helped reduce the carbon footprint. It was as high as $7500 at a time and it helped drive up interest in Tesla cars and made them a bit more affordable.
These are practical ways in which government grants can be useful for your business.
In other instances, there are several private institutions and individuals that offer non-refunded grants to young entrepreneurs.
An example is the Tony Elumelu grant to young entrepreneurs in Africa. The loan is a non-refundable $5000 grant to kick start your Business.
Agriculture is a sector of the economy that receives a lot of attention because of the role food plays in the well being of the populace. This makes agricultural business have access to some bit of grants and more tax breaks compared to normal businesses.
There are several agricultural schemes you can take advantage of if you are in this space.
Some other times, the government helps both large and small business when the impact of losing such businesses will be harsh on the ecomomy.
An example is the bailout granted to the big banks in the wake of the 2008 stock market crash
This type of grant is very controversial and no business will look forward to being in such situations.
Hunting for grants
In the United States grants.gov has a searchable database of government grants. The process of applying for the grants can take p to two weeks according to the website.
In hunting for grants one has to be particularly careful and wary of individuals and organized syndicates that will want to sell you fake grant directories.
Any grant that you are required t pay a certain amount at registration, is almost always a fake.
In some instances, these syndicates organize seminars in posh hotels/ seminar rooms and tell you that they will be selling you brochures and help you with professional grant writing etc.
They sell you membership forms and tell you to pay certain amounts after explaining how that the money you are paying is nothing compared to the amount you will be potentially getting if you win just one of the grants. In most cases, victims of these schemes lose their investment and find that the Organizations do not even exist at all or ceased o exist after the glorified seminar.
Loans and Investments
Funding for Businesses eiss majorly in the form of business loans and funding from angel investors, private equity funds, venture capitals etc.
Shying away from these well recognized systems in search of easy way out can lead to unfavorable results.