Small Business Loan Grants

Small businesses play a very important role in the development process. While the larger industries are technology driven, the small businesses are labour intensive. There is a greater scope for employment in small businesses. To encourage the growth of small businesses, government and other authorized bodies offer small business loans and grants.

The best thing about small business loan grants is that it is not repayable. This also becomes its drawback by limiting its availability. However, a business plan that has been intensely worked upon and checked for any loopholes has greater chances of being approved for small business loans and grants.

Small business loan grants are available only for financing projects rather than to be used as working capital. A small business loan grant is used for future projects rather than a project undertaken in the past. Small business loans and grants do not finance the entire project. Generally, 15-50% of the project cost is borne through the small business loan grants. The remaining cost has to be borne by the borrower himself. The borrower being responsible for a part of the project cost raises confidence that the project will be carried out prudently.