When starting up or expanding your business there are two ways that small businesses can get the funds they need. This is possible through obtaining grants or funding to help your business grow. This article will make you better understand the two options so that you can decide which opportunity works best for you.
Grants are money given to a specific group of people or businesses by the government and various organizations like non-governmental organizations. Funding can be a loan or alternative method granted to individuals or businesses by banks or private lenders like family and friends.
Grants do not need to be paid back making them more valuable and less risky compared to loans which put your assets at risk since they must be paid back. There are limited number of grants available whilst loans offer greater financing opportunities that are more accessible. Grants are therefore highly competitive, difficult to obtain and limited in amount of financing they can provide. Loans allow you to borrow as much money as you can depending on your credit and ability to repay. Loans usually require that the individual repay with some interest at a certain period and the lender has the right to ownership of the borrower’s asset if they fail to repay the loan.
As you proceed with your business idea and end up applying for a grant or funding opportunity, I hope that this article will help you make the perfect choice for your business.