The United States government has a clear and specific agenda for offering government grant to start a business, under 1400 different project heads. Actually, the word ‘grant’ is too small to define the purpose of the provision. Unlike other social security and medical aid projects where the deserving citizens do not have to make any kind of an upside approach to receive the appraisal for becoming a ‘beneficiary’, there needs to be a specific application of skill for winning an appraisal for government grants to start a business; generally known as a ‘grantsmanship’.
Government grants to start a business can be classified into the following categories:
- Formula Grants- Grants are preceded to States for further allocation to carry out existing or new activities and it is not constrained to a particular project; the distribution pattern being guided by the law or some authoritative regulation; the allocation principle is generally based on a specific formula.
- Grants for specific projects: These are limited within the vicinity of some specified project heads. They include allocation of money, in the form of scholarships, stipends provided during specific training schedules, grants for demonstration activity, funds for planning and evaluation activity and for technical aids or survey and construction allocations.
- Grants as funds provided in the form of subsidy: Subsidy is another method for encouraging people to take up certain projects and activities.
- The provision of funds directly without and restriction on usage: Those candidates, who satisfy the mandatory requirements of federal nature, are being assisted and no impositions are laid about the nature in which the money is spent. This provision included post retirement benefits like pension and other beneficiary programs. Specific fund allocated and meant for repayment within a certain expected time period. Subject to non-payment of any interest.
- Funds allocation needing insurance or guaranty: There is a provision for government grant to start a business with an arrangement to underwrite the receiver against any default in repayment of the same in this specific case. Hence, the fund needs a guarantor prior to allocation.
Insurance – There is also a provision for financial aid to be provided to make sure that any losses suffered under any condition are compensated. Compensation either may be provided by the Government or through private agencies and the payment of premiums is not necessarily involved.
Government grant to start a new business may also include the usage of land , equipment and other relevant facilities, which are owned by the federal state and which ultimately do not pass on to the beneficiary.
Government grants to start a business including provisions of certain extra ordinary services are very important. These involve the federal authorities performing specific object oriented activities for the betterment of certain groups or an individual. These projects may also be undertaken with involvement of the federal authorities, but the involvement is more than being consultancy or counseling agency. There are further provisions laid for the specific guidance under this kind of project heads.