What Are Business Grants, and Are They An Option?
Many small business owners out there have probably wondered what small business grants are, and whether they are a financing option for their new business venture. In this article, we look at what small business grants are, and how they can help your business plan to get funded.
What Are Business Grants?
Business grants are usually either from government, or from individual companies, usually as a part of a corporate social responsibility program.
Often, business grants don’t come in the form of cash, but rather in the form of equipment, tools, or other physical items that your business may need to get started. For instance, if you are planning to start a carpentry business, you might find business grants that will buy you machinery and tools that you need to start your business. There are also business grants that pay for specific training that you might need.
Who Qualifies for Business Grants?
Business grants are usually issued as a part of a social upliftment program, by government or businesses. That means that there are usually strict criteria about who qualifies.
In some cases, those criteria may be that the company is owned by a person from a specific group (BEE ownership for instance, or ownership by a woman.) Other criteria may be that the company will be operating in a rural area, where jobs are scarce, or that a certain number of jobs will be created, often for an underprivileged group.
Most companies and government departments that offer business grants will have their own criteria for selecting recipients, so you will need to contact each one individually, to find out whether you qualify?
What About Cash Grants?
As mentioned, in most cases, business grants won’t be for cash funding. That’s usually because the company or department that are offering the grant want to be sure that the people receiving them are genuinely committed to starting a business, and won’t use the funding for personal items!
In some cases, however, business grants are available to companies that have already received an order that they lack the capital to complete on their own. In those cases, you will need to provide proof that you have received a valid, irrevocable order, and some form of surety. You may also need to undergo a credit check.
Some business grants are also structured as loans, where you are required to repay the money you receive, albeit with a longer term, and relaxed conditions. Make sure that you find all of this out before accepting a business grant, to avoid nasty surprises later on!
Is It Worth It?
Getting a business grant is not an easy process – and with good reason. The companies and government departments who offer them want to be sure that they’re helping serious business people, rather than people who are just looking for easy money.
That’s also why business grants often come in the form of equipment or other items, rather than cash. However, while finding and qualifying for business grants can be difficult, and while you will probably not receive cash in your hand, business grants can be exactly the leg up that new business owners need.
So if you’re serious about starting your business, it’s definitely worth investigating the business grants that are on offer to your industry, area, race group or gender from government and big business. It might be just the boost that your business needs!