Every year, the United States government gives away billions of dollars in federal money. This money is awarded as grants to individuals, educational institutions, small businesses and corporate entities. For many, government grants have opened up doors and provided opportunities to earn a higher education, start a new business or expand a business you already have. And the best thing about earning government grants is you never have to pay the money back.

Government Grants

In a typical loan, either through the government or a financial institution, you are required to work through a complicated application to borrow money for a set amount of time. With government grants, you receive part of the tens of billions given away each week and in most cases don’t have to repay it.

Applying for grants is simpler, in most cases, than completing the full application and underwriting process required for most business loans. In fact, many business people who don’t qualify for loans, even on their personal credit, are able to obtain a government grant without a great deal of trouble. In fact over one million entrepreneurs receive money from the government every year.

The Most Common Grant Programs

The most common business grant is awarded through the government’s Small Business Administration. The SBA was created in 1953 as a separate entity designed to aid, consul, assist and protect the interests of small businesses throughout America. The SBA offers money designed to assist business owners in starting and growing their businesses.

Other grant programs include large grants often awarded by the government programs such as the National Science Foundation, the Department of Commerce and many more to companies or individuals engaged in research or information gathering that can benefit the government or the nation as a whole.

Government grants are available to companies and non profit agencies who work in areas covering minority assistance, education, research of many kinds and development of new ideas and products. Businesses that are identified as being owned by minorities or women are especially likely to receive grants for continued development, but there are available programs for all populations and business types.

Government Grants and Loans

There is some distinction between government grants and loans. A grant is money that is earmarked for certain endeavors or is awarded through certain criteria a business or individual must meet. Loans are also awarded based on meeting specific requirements. Both require some form of application, however government grants are not sums of money that is borrowed in the same format as a loan. Government grants do not have to be paid back at any time so long as the initial criteria are met.

In many cases, grants are distributed over a number of years. The grant might distribute a sum of money over a period of three or five years. To receive funds for the next year, progress or the use of funds must be shown to the government. While is true for very large grants, smaller grants are often made in one time payments, but you can expect follow-up to ensure the government’s money was spent for the agreed upon initiative.