Grants & loans

Why subsidies exist?

Government grants are funded by taxpaxer dollars and require very stringent compliance and reporting measures to ensure the money is well spent.  Research and Development activities (carried out by private or non-profits organizations) by nature are one of the major recipients of theses grants & loans.

What are subsidies (Grants & loans) ?

Some business grants are available through country, state and local programs, non-profit organizations and other groups.

These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. The amount of the grant money available varies with each business and each grantor.

While Europe’s future competitiveness and sustainability depend on many factors, several stand out: these include new (environmental) technologies, Public-Private Partnerships and the need for more people in knowledge-based occupations.

These often depend on initiatives which governments support through grants and incentives.

There are three types of external subsidies:

Grants, where funding (cash) is directly paid to the project leader.

Soft loans, where loans are secured for projects institutional banks are reluctant to finance.

A loan is a type of debt.  In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and has to pay back or repay an equal amount of money to the lender at a later time.

Typically, the money is paid back in regular installments, or partial repayments. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive (zero interest) for the lender to engage in the loan. (Generally government agencies do not make loans directly to business owners.

The government provides a guaranty to banks and lenders for money lent to small businesses. This guaranty is a promise to pay a portion of the loan back to the bank in case a business owner defaults on the loan.

A guaranty reduces the lender's risk, which allows the lender to make loans to business owners who do not qualify for traditional loans.

Awards, usually a money prize, recognizing the Innovation effort or Business excellence and giving a free publicity.

Each type of grant can be managed at a regional, national or global level.

There are hundreds of thousands governmental subsidies available for businesses all over the world. Each program has unique application and eligibility requirements.

Before you apply, be sure you get some basic documentation together that will go into just about any package.