Business Loans VS Business Grants:
What is the better choice for my business?
Small and Medium business owners have multiple ways to secure financing for their businesses, but the biggest hurdle is what venue should they venture down with. Both options have their positives and negatives and the final choice should be made based on not only your business needs but your financial well being.
Should I apply for a Loan?
Getting a Loan could possibly be easier to achieve than obtaining a grant. First, let’s talk about the negatives; a loan will need to be paid back and most likely with interest. If a payment is missed, there could be a penalty imposed on the owner or the business itself. Getting back to being easier to achieve, a loan can be given based on the owner’s finances and credit history. Some credit institutions will ask for a business plan before lending out the money especially if the loan is specifically tailored for businesses. Also, Loans usually have no restriction on how the capital can be spent or managed; the funds can be dispersed at the owner’s discretion.
Should I apply for a Grant?
Small Business Grants are quite possibly more difficult to obtain that a loan and have tighter restrictions on what the funds can be spent on. The best thing about grant’s, is that you do not have to pay it back in any way. The money is yours to be used based on the criteria you applied for. There is also a lot of competition to obtain any of the multitudes of grants. Your business case in the grant application must be strong and appeal to the granter; it will need to be way above the rest of the applicants. You will need to show how the grant will be used to improve the local or provincial economy; this is one of the key aspects in winning the grant. Remember you can only spend your grant based on the criteria you are applying for, if you are applying for a R&D grant, the money can only be spent on research and development. If the money is spent anywhere else, the grant can be revoked.
What is the best solution for my business?
There is no wrong answer, you will need to sit down and do your homework on what road to go down. Canadian Business Publishers is here to help you in any questions you may have regarding your choice of funding. We are one of Canada’s leading government funding experts, give us a call at: