Pros of Grants for Small Businesses
Well, as we all know, the first and foremost “pro” of business grants is that it’s in actual fact, free money. Business grants do not need to be repaid to the funding source. This is certainly some form of good news for online business owners, entrepreneurs and small business owners who may be running out of finances and are not able to receive and repay business loans, or small business owners who are actually planning to expand their business but lack the financial means.
Another “pro” of business grants is that getting info about available grants online is not difficult because there are multiples free resources and information database that points small business owners to the direction where many grants are available.
However, to every good qualities of a product or service, there are bad traits trailing it.
Cons of Grants for Small Businesses
Unfortunately, the disadvantages of small business grants somewhat outweighs the advantages attached to it. Here are the disadvantage of small business grants:
- Business grants are free but you have to pay with your time – Your time is one of the several hidden costs associated with the “free money” offered by the Federal and state government. There are excessive amount of paperwork to be done when pursuing a business grant. Aside your application for business grant, they will want to know the products or services you’re offering, extra documents such as your market demographics, and reasons for applying the specific business grant.
You need to justify “Why” and “How” you intend to use the grant that will be given to you – Whilst applying for a business grant, you will need to explain in details, why your business need the grant and how you plan to utilize it. Explaining this may require you to plot graphs, charts, budget numbers, projection sheets, and possibly – market demographics too. All these will help paint a picture of your intentions regarding the business grant you are applying for. And if you read between the lines, you did find out this is time consuming as lots of researches, planning and organization will be involved.
All these are required to inform the grant issuer – usually the Federal government, state government and local authorities – how the business grant will benefit the state and the society at large.
- Next, you play the “Waiting” game – After sending application for a business grant and reasons explaining why your business need this grant, you have to sit back and wait for their response – which comes in weeks or even months. This can be quite annoying and frustrating for small business owners and entrepreneurs who need this financial funding in a faster turnaround time.
- There are thousands of applications towards the same grant you are applying for – This is not to discourage you but to simply sate the truth on ground. There are thousands of other business owners and entrepreneurs like you seeking to get same business grant you are seeking to apply for and possibly get. Hence to save yourself some time and efforts, you need to know the strength of your business and how well your business matches the grant eligibility criteria. These would help you position your business appropriately during the application of the business grant.
- Business grants comes with strict terms – Grant offered by the Federal government, state, or local authorities are gotten from taxpayers dues hence stringent rules are tapped to it by the Government. Unlike business loans, small business grants are not issued for starting a new business, covering operational expenses of a business or paying off debts owned by business owners.
When you finally get the small business grant you have been seeking for, you will always need to look over your shoulders. Why? As you have been approved for a business grant, some certain people will be tasked with checking on your business to measure the progress of growth in relation to the amount of grant received by you. These checks may be monthly, quarterly, or done every half-a-year. They often request for proof of efforts – example, marketing efforts – towards achieving the goals outlined in your grant application etc.