Often, budding entrepreneurs need financial assistance for a successful start of the enterprise. There are various ways to get finance, one of these is a grant. Today we will talk about what a grant is and how to get it for small business development.
Grant - what is it?
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An excellent opportunity to start a business or expand it is to receive a gratuitous amount of money - a grant. The generally accepted concept for this term is the following definition: a subsidy received by an enterprise, organization, or individual in kind or in cash to start any activity. Funds received are non-refundable, but the recipient must keep records of their use.
In simple terms, we can say that a grant is a kind of start-up capital.
A subsidy is a powerful impetus for starting an enterprise, so such payments are in great demand. In the language of economics, demand clearly exceeds supply. Therefore, funding applications must be worked out in detail.
The owner of the organization that received financial support is responsible for the distribution of funds, thus it is he who will be punished in case of misappropriation of capital.
Who issues grants
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You can get donations from a variety of organizations, including:
- State bodies.
- Charity organisations.
- domestic investment funds.
- Unions of Entrepreneurs.
- Commercial banking structures.
- Foreign investment funds.
- National organizations of foreign countries.
- non-profit foundations.
To receive the coveted sponsorship, you must take part in the competitive program by providing a certain package of documents. You should contact the relevant departments, that is, if the specifics of your organization are finances, then you should not ask for help from the healthcare sector.
Information about current competitive events can be obtained from the Ministry of Economic Development of your region, on specialized electronic resources, as well as on the websites of business incubators. Such sites contain information necessary for participants - the period of the event, the deadline for accepting applications, requirements for participating organizations and a package of mandatory documents.
How to get a grant to start a business
First of all, it is necessary to clarify what types of organizations are likely to receive assistance. Foreign investment funds are supporters of sponsorship based on a detailed plan for spending money and its strict observance, while state organizations prefer solving the problems of employment and social security. Therefore, the former more often transfer finances to already “experienced” participants in the competition, and the latter to beginners.
The state adheres to the principle of allocating funds for the "first steps" of a novice entrepreneur. With particular attention to less protected categories of the population, such as:
- University graduates.
- Workers who have been made redundant.
- On administrative leave.
- Single moms.
- People with disabilities.
- Former military.
Documents required for participation in the program
In order to take part in the competition program, the company must provide a package of documents, it includes:
- Application for participation.
- A copy of the identity card of the owner of the organization.
- A copy of the document on higher education.
- A copy of the statutory documentation of the enterprise.
- A document confirming the state registration of the organization.
- A document confirming the presence of the enterprise in the register of small businesses.
- Certificate from the tax authority on the absence of debts.
- Business plan.
The last point should be discussed in more detail. Almost half of the success depends on the business plan, so its development should be given due attention. With proper preparation of the document, it is necessary to make clear calculations of the financial part, supported by real numerical indicators, graphs and other evidence of the need for targeted distribution of funds. You should also provide accurate information about the name of the project, its goals and objectives, intended results, strategy and timing.
Depending on the field of activity of the enterprise and the type of sponsoring organization, the list of required documents may vary significantly. There are cases when foreign funds want to receive information that, at first glance, has nothing to do with the project.
Stages of participation in the competitive program
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- Monitoring of current competitions
Find out which financing programs are relevant in your field of activity. Read the conditions for participation and receiving funds. Analyze the activities of organizations that have already received grants in this program.
- Collection and transfer of documents
Collect a package of necessary documents, draw up an application for participation and think over a business plan in detail. Submit the documentation to the sponsoring authority.
- Project Protection
Make a strong defense of your project, pointing out its strengths, as well as its help in reducing the unemployment rate in the country.
If your project is approved, a grant agreement is concluded with you, and funds are transferred to the bank account of the enterprise.
Features of subsidizing
Like any other sponsorship, grants have certain features of the issuance and distribution of funds. Among them are the following:
- Funds are received not by the subject personally, but by the enterprise to fulfill the conditions of the competitive project.
- The purpose and amount of the subsidy specified in the business plan cannot be changed.
- To receive assistance, the project must be as realistic as possible.
- To improve the chances of receiving funds, participants should be especially careful in choosing their grant profile.
- The allocation of funds is gradual.
- Sponsors try to give out a grant in real terms (machinery, equipment, etc.) as much as possible.
- A certain amount of funds is allocated for each of the stages of the project.
- Misappropriation of funds threatens with certain sanctions.
- The organization needs to draw up reporting documents and transfer them to the sponsor in accordance with the established regulations.
How to get a small business development grant
In order to receive subsidies, it is preferable for small businesses to send applications for renting premises, purchasing equipment and special equipment, and purchasing raw materials and other materials. Those entrepreneurs who are able to cover part of the required funds on their own have the highest chances. Such a strategy will show the relevant commission that the contestant is serious.
According to statistics, about 35% of enterprises that received financial assistance specialize in the provision of services, 25% work in the manufacturing sector, and 15% in the field of trade.
Funding Trends
- Foreign sponsors are loyal to such an item in terms of calculation as the remuneration of employees, while representatives of our country often do not support such initiatives.
- The state gives preference to projects in the field of agriculture, science, education, foreign funds - to conduct research in the fields of ecology, economics, and social interaction.
- Commercial sponsors of our country are committed to innovation in economic and business processes.
Develop a detailed strategy for the targeted use of funds and a system to prove the need for a grant for your enterprise. With a competent business plan, it is possible to get subsidies for projects in any field of activity. By the way, on our portal you can read that will help you run a business successfully.
