Business grants

Any large business to be initially setup requires a great deal of money and investments by the enterpriser.The concern of any small businessman when he is thinking of diversifying or when he is planning to move up to a bigger business is money.The businessman could have a great deal of money in the form of accounts,funds or other type of investments.But to lay his hands on real money(cash) he would have to carry out a large amount of liquification of his assets which takes a large amount of effort and time.This is greatly reduced by means of business grants which is a kind of funding by the government to support and encourage small business to enlarge their current level of business thereby creating more jobs in the effort.The reason why such schemes are given government aid is because it creates a larger scale of jobs which eventually reduces the level of unemployment prevailing in the country.To setup and enable such business grants the government makes use of the taxpayers’ money which is distributed through multiple channels of departments,ministries and agencies present throughout the country.Small time businesses will be thrilled by the fact that they are encouraged to apply for multiple business grants at any given time.The various types of business startup grants available to the average businessman are as follows-

1.Direct Grant: Business which provide activities such as training of human resources,providing employment opportunities, export development, recruitment or capital investment projects are given direct grants which is a type of reward or cash incentive.The companies or business which makes use of business grants have to invest half the capital or finance required in setting up the business.

2.Repayable grant: This type of grants are given to businesses with the option of repaying back of the funds out of revenues generated by the company in the future.But failure to do so in the event of a business failure or a business loss this grant is written off.

3.Soft loan: This is a type of grants given to businesses in which the mode of repaying of funds is very easy on the businesses concerned.The rate of interest in these type of grants is much lower and sometimes the grant is given even without any interest rate levied upon it.The company can also repay the grant after a considerable amount of time.

4.Equity finance: In equity finance the business is given funds through a provider who claims a share or stake in the company.When the business returns the funds to the provider it can reclaim the stake.This is almost similar to venture capitalists,the difference being that the providers of equity finance are less demanding on the business involved.

5.Access to resources: In some cases the business would have the required skills and human resources required by the business but would not have the necessary resources(materials) required for the production purpose.Such businesses are given appropriate materials by giving them access to a public resource facility.