Grants are non-refundable funds given out by the government or a non-governmental organization to a recipient, often a non-profit organization, a school, an individual, a hospital, or a business.

Getting a grant can be very exciting for any business owner. They could use the money to buy stock, repay a loan, or even establish business premises. However, there are several advantages and disadvantages attached to business grants. They include;


1. Free money

One of the main benefits of business grants is that it is free money. Unlike other forms of financial aid that a business could sign up for, such as loans, business grants are non-repayable.

This means that the business owner does not need to worry about repaying the money with incurred interests. Banks and other lenders often limit the loans people can get depending on their creditworthiness or the assets they have.

This is not the case with business grants. You can get the highest amount of money possible depending on business venture's profitability or how you present your ideas.

2. More money to come

Another benefit that you can get from receiving a business grant is that you become eligible for more money to come. If you present your business ideas well and one organization awards you a grant, there is a greater possibility to receive more grants from other organizations.

Success in your business venture can motivate other organizations or the government to award you more money. This is because you have proven to be responsible and even more worthy.

3. No lost control

Other lenders and even banks might include some terms and conditions when they lend you a loan. These clauses could include giving up a percentage of your business shares. This isn't applicable in business grants.
When you receive a business grant, that is the end of it; there are no terms and conditions attached to the deal. This means you can able to fund your business without losing control of your business.

You won't have to give up shares, ownership, or even management of your business when you receive a business grant.

4. It is a form of promotion

When you win a business grant that has been so popular among business owners, your business gains some credibility. People become more aware of your brand and the products you deal in.

This is because winning a business grant proves that there is something unique about your business that stands out from the rest. This could even lead to your business being considered for more future grants.


i. Time-consuming

The path to obtaining a business grant can be very time-consuming. You have to do lots of research about the available business grants and fill out even more applications. Finding that grand that is adequate for your business venture is not an easy task.

You also need to formulate a very convincing and detailed proposal when applying for a business grant. This proposal is the most important part because it will make the organization or government consider you and not the other applicants.

ii. Stiff competition

As much as a business grant might be appealing to applicants, it is very hard to win one. With thousands of businesses seeking funding for the businesses, it makes the competition even tougher.

On average, there are thousands of business grant applications sent out a day from all sorts of businesses, and those who end up getting the grants are few. This makes business grants a very complicated gamble to take part in.

iii. Restrictions

Although you won't end up losing control or ownership of your business, receiving a grant can come with some restrictions. Everything that you've detailed in your proposal has to be followed to the latter.

You have to specify how you will spend the money received so that the organization can be sure about your purpose. This makes it hard to use the money for other ventures unrelated to your business if they weren't listed in your proposal.

You should ensure that you think about your short-term and long-term business goals before writing a business grant proposal. This will be helpful for you in case you want to broaden your business ventures in the future.


Even though there are some disadvantages attached to grants, you can't deny that it is a very convenient source of funding. If you have a great business idea, grants might give you the breakthrough you seek.

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