Pros and cons of business grants

The only thing that can stop your business idea from thriving is the lack of capital. even with the right business idea, you need to come up with enough money so you can start the investments. Grants are a great source of capital for start-up businesses.

The benefits of getting a business grant

You get free money

This is the main reasons many people apply for grants. It is the most common advantage of grants. You are getting free money which means you do not need to pay the institution that gave you the loan or government back. It makes grants very appealing for people who are looking to start a business. There are multiple grants available in large amounts depending on the type of business you want to start

The information on grants is accessible

There is endless information online on how and when you can apply and get the grants. The accessibility of the information is important and makes it easy for you. You do not have to meet several lenders and get multiple rejections in order to get access to the loan. It does not matter your industry or business, you can access the information and resources for free

The waterfall effect

If you have ever been awarded a grant of any kind, you are more likely going to receive another one.  If someone has already give you some money in the past to start a business and it was successful, other investors and organizations are more inclined to give you money as well. The water effect can benefit you and your business when it comes to re-funding or even capital.

You gain some credibility

Not only will the first grant you great a waterfall effect but it will also lead to an increased visibility getting a famous or well known grant will provide you with major benefits that offer you a financial advantage over the other people. It gives you the exposure you need for your business to other investors and you also get to promote your business for free.  You get some credibility for your work, which is great for any business really.


It is time consuming

You have to do plenty of research and fill out what feels like endless paperwork during the application process. There are multiple types of grants available but they are specified. You can only apply for a grant that is in line with your business or industry. The hardest part about this is the proposal you need to create together with the application.

It is difficult to receive a grant

The competition for a grant application is really high, especially if you work in a very popular business field. Every day, an average of 3000 proposals is submitted and only up to 10 percent of those people will receive the funding for their business.

There is an uncertain renewal

In addition to the tough application, you are not guaranteed if the grant provider will renew it once you need to apply for a second one. This means that if your business is going down, you still might not be eligible for a renewal.