Is Grant-Based Financing Right for my Business?

Funding your business can feel like a risky investment. One way to mitigate the risk is to use Grant-Based Financing.

But what is grant-based financing anyways and how does it work?

Curious to know more?

This blog will help you understand what grant-based financing is, how it benefits your business, and when you might need it!

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What is grant-based financing?

Let’s break it down:

Grant-based financing is short-term financing used to meet financial obligations before you get grant funding in your hands.

Like most loans, grant-based financing comes with interest rates and use of collateral. Still, it makes for an excellent way to fund projects that your business couldn’t otherwise do.

This financing is often non-dilutive, meaning you retain all ownership of your business and your assets become used as collateral.

Grant-based financing is usually secured in a quick time frame, meaning you don’t need to wait around for document approval before getting money in your pocket.

Then, once you secure the actual funding you were waiting on, the loan gets paid back.

What can grant-based financing be used for?

Most businesses are likely interested in grant-based financing as a fast and effective solution to use alongside government funding and grants.

Why use grant-based financing?

  • Grant-based financing is a great way to take advantage of grants that don’t give you cash upfront (note: most grants work on reimbursement). So, bridge financing is a quick way to pay for your project while you wait for reimbursement from your grant provider.
  • Another type of funding that takes quite a bit of time to secure is investor or equity funding. Say you’ve secured investors for your business, but the cash flow is taking a while and you need immediate funding — enter grant-based financing!
 
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Why consider grant-based financing?

Grant-based financing isn’t for everyone. With interest rates and collateral, it’s not always the right choice.

But if you’re interested in grant funding, and just can’t afford to pay for the hire or project without immediate reimbursement — grant-based financing might be for you.

If you want to fund IRAP or SR&ED, but it’s just not feasible right now, once again, grant-based financing might be a good option.

There’s a common misconception that starting a business can only be for the extremely wealthy, but with options like grant funding and grant-based financing, creating your dream startup doesn’t necessarily have to be a dream.

How Pocketed makes grant funding accessible

At Pocketed, we believe funding should be accessible.

Investor funding and crowdfunding might work for some, but not everyone has the luxury of giving away equity or taking a long time to fund your business.

Let’s keep breaking down barriers to entrepreneurship by making grants as accessible as possible with simple solutions like grant-based financing.

Interested in bridging the gap between grants and immediate funding? Create a free Pocketed account and start browsing grants at your fingertips!

Check out OKR Financial for more information about their grant-based financing solutions. They provide grant-based financing to small and medium-sized businesses as a way to bridge the gap between grant funding or loan programs.

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