Monday, December 11

Your Money – Finance Column – Government Grants

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A grant is a sum provided by government or any other agency to a business or an individual for a specific purpose or project.  It covers a part of the total cost to be incurred.  If all the conditions are met, then there is no need to share the profit of the business or repay this sum of money given as grant.

Government grants are given to provide support to businesses financially.  But getting this support is not easy as there is always stiff competition and the parameters used to determine the eligibility are very strict.  Generally, there is no need to repay the grant amount, but if the conditions are not followed, the paid grant has to be returned.  Government awards grants for specific purpose and the sum has to be utilized for that particular purpose.

Most of the grants given by government require the receiver of the grant to contribute equal sum as the grant cover part of the total sum required.  The factors influencing eligibility requirement for government grant are:

Location of business:  Location of business plays an important role in securing government grant.  Socially and financially deprived areas have more chance of securing government grant.  Also, area where low employment persists has greater chance of securing grant.

Size of business: Eligibility of grant may depend on size of business either by number of employees working or by turnover.  Some grants are reserved for small and medium sized businesses.

Industry: Certain industries are provided with government grant specially those industries which require boost to compete with other industries.

Purpose of grant: As grants are awarded for specific purpose, that can determine whether one gets grant or not.  Government decides this on basis of objective, targets and results of business while awarding grant.  While doing so, it expects high commitment from businessmen who are to receive grant.

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