Grace Forms Blog

Grant Guides or Loan Guide? The Difference is Distinct

The Washington Post published an article yesterday that we felt was almost exclusively a loan guide and not so much a grant guide, and was more than a little misleading.  The article was titled “How to hit up Uncle Sam for small business funding.”  The implication of the title is that there is more than one way to get government funding for a small business other than loans.  However, the article mentions grants twice, and there is a somewhat valid reason for that:  small businesses and for-profit companies do not qualify for federal grants.  So, what else is there?

Well, there are loans, and there are a lot of different kinds of loans and sources that the potential start-up can use to, well, start up their business.  Of course, these come with certain conditions and restrictions, but a grant guide would tell you the same ideas apply even if small businesses did qualify for grants.  Whenever the government is dealing with money that it owns, you can bet that they are going to keep track and want a record of every single penny, and nothing shy of that will suffice.  But, because loans are a different beast entirely, in many cases, they are actually the better choice.

The differences between grants and loans are about as different as toasters and horses.  Aside from both being “things”, there is not much else they share in common.  In the case of the former, everything basically stops at, “both involve the government giving money in some way.”  In other words, a grant guide will be of little use to those seeking a loan.  What most people do not realize is that grants are not simply “free government money.”  This money comes with conditions and record-keeping that accounts for every cent given.  And, contrary to popular belief, any remaining money has to be given back to the government at the end of the project (oh, and you need to provide a timeframe for when that would be).

With a loan, though, an amount is expected to be paid in specific amounts as specific times until it is paid off.  It is, for all intents and purposes, like a normal loan, except, as with anything involving the government, there is more red tape and paperwork to get through.  That said, though, since a grant guide is out of the question, a loan that helps you reach your goals and dreams is probably worth more than the hassle of getting through that extra stuff.  Fortunately, government loans tend to not be as restrictive in regards to the bean counting as grants are, which will allow you to focus more on your business than keeping up with the paperwork.

The good news, though, is that the article did provide some good guidelines for applying for a government loan.  We were just a bit miffed that it suggested there were other options when there aren’t.

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