A Small Business Grant is Not Free
A Home Business Article Contributed by Christopher Kyalo
A Small Business Grant is Not Free
The conditions for a small business grant are usually so tough that it would be much easier to secure a small business loan instead.
To start with grants are not free as such because a lot of tough conditions are tied to them. One needs to understand why grants are created in the first place.
A Small Business Grant is Highly Targeted
Usually there is some objective which the federal or state government would like to achieve in dishing out the grants. It could be to improve the living standards in a certain neighborhood resulting in many other benefits to society. Or it could be designed to speed up the application or development of some new technology that is not immediately financially viable and therefore would not attract funds from the research and development departments of commercial companies.
So in effect the loan is not really free but budgeted funds for the purpose of achieving a certain objective or goal.
There are Usually Very Tough Conditions Tied to a Small Business Grant
In order to ensure that the objectives of the funds are met, the process for assessing potential grant candidates is usually rigorous with several qualities and attributes demanded of the companies applying for the grant.
One of the requirements one is most likely to find is that of requiring the business to be on a very sound financial footing and with a good track record of the same. It is not too difficult to know why this is the most common demand for any grant. The grant administrators would not want the funds diverted to another aspect of the business and away from the specific area they would like developed.
This requirement immediately disqualifies a lot of new home based small businesses from qualifying for these grants. Although many home based businesses grow into multi-million dollar operations over time, the start is often difficult. The majority of these enterprises would be cash-strapped with no financial standing or track record to speak of.
Why It is Much Easier to Get a Small Business Loan Rather Than a Small Business Grant
With these sort of stringent requirements, amongst many others, it becomes abundantly clear that a small business loan would be much more viable and within easier reach for many small home based businesses than a small business grant.
Coupled with the fact that these days there are multitudes of sources for a small business loan, leaves no doubt as to which is the more prudent path to take.
The Objectives of a Loan Giver are Much Easier to Meet Than Those of a Grant Giver
A grant giver usually has very complex objectives and will therefore look for the most appropriate candidate to help them get where they want to go. On the other hand many loan givers have much simpler objectives. Many of them are driven by a simple profit motive and will give the loan to as many recipients as qualify and as long as the funds are available.
