When you think of places where you can access finance, your first thought might be to consider the private sector. But in fact, a very good option is to look at the government grants, incentives, equity and loans that are available. Depending on the fund option, the greatest benefit of accessing one of the finance options is that you may not need to pay the money back.
To help understand how government funding works, let’s explore the difference between a grant, a loan, an incentive and equity. The section that follows outlines these differences and then provides a summary of each government funding option. The module entitled What Government Lenders look for explains the strategic reasons behind government funding and will help you understand how to align your application with these strategic goals.
Government finance generally comes in 4 forms:
Grants: Finance from 35% to 100% of the application. Grants that are less than 100% require you to fund the balance of finance required for the project at hand.
Incentives: Payment is received in tranches according to agreed upon implementation milestones. This means you will not receive the funds in a lump sum. Rather, payments are received at set times and subjected to an audit from the funding agency.
Equity: The fund purchases shares in your company. This provides you with the finance to complete the work as per the approved plan.
Loans: Either a slightly lower interest rate is offered or funds are made available to selected companies that have had their finance application rejected by private sector lenders.
Read the document Summary of Government Funds to see a brief synopsis of the various types of funding available from the government.
Finfind provides its services free of charge to businesses seeking finance. Our primary purpose is to link SMEs with all the relevant finance providers and finance products that match their funding needs. As a matching service we are not required to be a registered finance provider as we do not loan money directly.