You need money to start and grow your business. If your own funds are not enough, you can take a loan from a bank or borrow from friends. There is another option: to try to get a grant. Let’s see together what that is, how it differs from financial assistance or a loan, where to look for grant givers and how to draw up documents to apply for one (or several).
What Is a Grant Aid
A grant is a type of targeted financing, that is, a certain amount of funds that is provided to an entrepreneur under clearly defined conditions. The grant does not need to be returned. There is no paid interest on it. Unlike other types of targeted funding, grants are awarded on a competitive basis and are one of the most attractive ways to finance a business. For example, you can open your own real money casino canada with grants allocated by international institutions. The key is to have the perfect application.
The number of grant programs in the world is constantly growing. Moreover, such targeted funding can be obtained both within the framework of government initiatives and from private companies or international organizations.
At the same time, grants are optimal only for start-ups or small and medium-sized businesses. This type of financing is hardly suitable for large companies.
How to Get a Business Grant
The key feature of the grant is competition. Only the winner of the competition is eligible to receive funds. Therefore, a grant must be distinguished from targeted funding for state government programs, where there is no competitive selection.
To receive a grant, you must go through several standard stages. The first is the submission of an application, to which you need to add a business plan or financial justification for a business project. More precise application criteria are specified in the conditions of the grant program.
The next stage is the analysis of these applications by an expert jury and the selection of winners.
At the last stage, after some time has passed, the grant recipient must report on the expenditure of the allocated funds and the achievement of the goals set.
Thus, applying for a grant does not automatically mean receiving funding. On the contrary, on average, only every tenth entrepreneur who took part in the competition receives money.
So, it is more judicious to apply for several grants at once. That way, the probability of winning at least one of them increases. In any case, you will gain valuable experience on how to properly draw up documents for the competition, understand where the weaknesses of your project are, and so on.
What Is the Purpose of Grants?
It should be borne in mind that grants are not issued to support, say, small businesses or individual farms. There are other methods for these tasks, for example, one-time financial assistance from the state.
Grants, on the other hand, are usually aimed at solving certain and clearly defined tasks. So, we can talk about employment of the population and the creation of new jobs in depressed regions, the employment of citizens with disabilities, the development of environmental initiatives, the support of independent media, the financing of scientific research, training, etc.
Top Mistakes Applicants Make
If you don’t want to be rejected even at the stage of applying for the competition, you should take care of the correctness of the paperwork. The most common mistakes are usually listed as follows.
- Inaccuracies in passport data. For example, the name and surname in the passport does not match the data in the TIN, or the passport is not valid at all.
- There are unpaid loans, tax arrears, or a lien is in effect at the time of application, or the applicant is under legal proceedings. To avoid problems, you need to check all documents before filing and pay off debts.
- Misuse of funds. Read the terms of the grant carefully and follow them. Funding received may only be used for the purposes specified in these terms and conditions. For example, a grant is given for the purchase of materials and equipment, and the businessman intends to pay for the rent of the premises with this money.
- An application for participation is submitted on behalf of an individual, however, the conditions indicate that only legal entities can participate in the competition.
- Incomplete set of documents. The terms of the grant indicate a list of documents that the applicant must bring to the interview. Collect the entire package of documentation in advance.
- Incorrect co-financing calculations. Many grants are given on the condition that the state or non-governmental organization (NGO) pays only 50-70% of the cost of the project, and the owner of the enterprise contributes the rest. If VAT is not included in the cost calculation, then errors may occur in the proportions of payment for each of the participants. These data must be carefully checked before submission, in extreme cases, involving a specialist.
Where to Look For Grants?
In Europe, grants are a standard and quite common practice for obtaining funding in the European Union. There are thousands of grants for the European continent. This means that businesses should take a closer look at this opportunity to access finance.
There are quite a few grant programs on the EU4Business portal, this is a large-scale initiative from the European Union to support countries in the EU. On the organization’s website, you can find out how to get grant or loan funds, scale your business and enter new markets.
In addition, you need to look through the news of the Business Support Centers, websites of government bodies, web resources of various NGOs, and also track other sources. Business grants are a popular topic, so the media is eager to write about it in order to collect additional traffic.
Grant Program from USAID
The United States Agency for International Development (USAID) launches many grant programs each for countries all over the world. It targets start-ups and small and medium enterprises. USAID’s main goal of the program is to increase the competitiveness of small businesses in the domestic and international markets, as well as to help develop a simplified and transparent business climate. Not only companies of various sizes, but also business development organizations and industry associations can count on receiving grant funds.
The resulting funding can be spent on the purchase of IT solutions, product development, the creation or restoration of supply chains, employee training, online promotion and other tasks that are more or less related to ensuring business continuity. To apply, you must first register on the USAID website.
Grants for Maximizing Chances of a Growing Business
Grants are a new and attractive way to provide funding for small businesses. The money is actually donated. If the conditions set by the grantor are met, the funds do not need to be returned or interest paid on the amount taken. At the same time, it is not easy to get a grant. You need to prepare a competitive business plan, pass the competition and win it. However, the reward in the end is worth the effort. Therefore, when starting or developing your business, be sure to pay attention to this type of targeted financing.