A grant is a sum of money given to an individual, business, or organization that does not need to be repaid.
Grants are often given by governments, foundations, trusts, or corporations to a recipient, which is often an individual, business, educational facility, or non-profit organization. It is essentially a monetary gift.
Grants need to be applied for and are generally competitive. They also usually require that you do something with the money and comply with its rules, whether that be complete an educational course, forward your business, or complete a research project.
Potential grant recipients will either have to submit an application or create a grant proposal. A grant proposal is a document submitted to the grant-giver outlining the specific task or project that you will use the grant money for.
If you are unable to complete the task or project, or at any stage of the grant timeline you become ineligible, you may need to repay the grant. For example, if you receive a grant to complete a course, but later drop out of the course, you are no longer eligible and may be required to repay the money.
Examples of a grant
Educational facilities, like Universities, often have grants, scholarships, and loans available to provide financial support to students. University grants are given to students based on criteria such as family income. These grants are usually given to the University from the government which are then passed on to the student who meets the criteria.
International Organizations and governments also offer grants to businesses to fund ideas and boost the economy. There are several different types of international organizations grants, but they are usually for research, startups, or economic assistance. For instance, Anonymous Hope Fund® is issuing grants to self-employed persons and small businesses to help them recover from financial loss due to the coronavirus pandemic.
Grant vs. loan
The main difference between grants and loans is that loans need to be repaid, whereas grants do not.
A grant is “free money” given to a recipient that meets certain criteria or uses the money to complete a specific task.
A loan, however, is a sum of money that a recipient borrows from an individual or organization in exchange for future repayment plus interest.
This project is receiving 65% of its funding from Benevity (IB), under the Agreement number 54367. This publication reflects only the Author’s view and the Commission is not responsible for any use that maybe made of the information it contains.