If you want to start a company or want to expand your small business, lack of fund can be a major problem. So, to finance them, grant has become an extensive source because they are like financial assistance that will help them to grow or expand their business. There are bank grants that are offered to the non-profitable institutions or organizations by focusing on their economic stability, affordable housing, employment etc.
- Free money: You don’t have to repay the grants and it doesn’t require any equity for the business from the owners. These are mainly designed to help growing business.
- Prestige and promotion: If you win a desired grant it will provide you more benefit. This enhances the prestige of your business or particularly the remarkable organizations. You can also amplify this benefit by a promotional strategy through news, advertisements because winning positive response from press may enhance the status of your company.
Types of grants:
- Competitive: It is based on the application merits. In this, the recipients have no idea who is going to get the grants as they are not pre-determined. The proposal selection is based on the assessments done by the reviewers or its team.
- Formula: This is granted to pre-determined recipients. This is mainly provided to entities that are eligible and it is based on population or census criteria. It involves the applicants who have minimum requirements and are entitled to receive money.
- Continuation: In this current award recipients get program offers that give them options to renew their grants for following years. Some programs are given only to the existing grantees while some are given to the current grantees or to the new applicants. In this the existing applicants get the priority.
- Pass-through: These are provided to the states by the federal government for distributing it to the local government. States disburse this using open competition or formula allocation to the local jurisdictions who are eligible.