Grants and Loans, the Differences you Should Know

You may have heard someone tossing around the terms grant and loan in the same conversation, using them interchangeably. The truth is that there's a big difference between a grant and a loan. A grant is usually an amount of money awarded to you for a particular project or idea - something you don't have to pay back. On the other hand, a loan is something you borrow (using something else for capital) that you have to pay back.

Grants are typically given more to individuals and small businesses in need moreso than large corporations or institutions. This isn't always the case, but it's something that you can use to your advantage. Big corporations have a pretty easy time getting loans for various reasons. With that in mind, it may be easier to convince a grant committee that you need the grant because you can't get a loan like a large corporation would.

Why Grants are Better than Loans:

• You don't have to pay them back. Grants are, in most cases, never something that needs to be paid back. There are exceptions to the rule, of course, like certain education grants, but for the most part if you get money from a grant, you don't have to pay it back.
• You Don't Need Capital - To secure a loan of any amount these days, you need to have enough capital to cover the value of the loan - be it a house, property, a business, or some other large value asset. To apply for a grant, it's almost better if you don't have these things. Without a need for capital, grants are available to help a lot more people.
• Endless Possibilities - While banks and other lending institutions generally only lend for certain things - cars or homes, for example, there are grants available for a lot of different things. From fixing up your home to paying off your mortgage to going back to school, grants are available for a lot of different reasons.

Grants, Loans and Moans, Oh My!

The whole business of both grants and loans can be a confusing, stressful experience. Luckily, if you're interested in applying for a grant (or even just seeing if you might be eligible for one), there is a lot of help available on the Internet. Knowing when to ask for help and where to ask it might be the hardest decision you make when it comes to applying for grants rather than loans.

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