The classification for the small scale business is done based on its capital, profit, manpower and productivity. Few of the business are commenced with self finance and mostly it is done with the funds borrowed. The government in many countries has started funding by wayto small scale business mainly to prevent the huge down payment as interest to the banks. The grant given for the business assists the owners or the proprietors to get the principle amount and there is no worry for them to repay the amount in future.

It has given to the small scale business also helps in developing the growth of the small companies as the source from where the financial support received is reliable and stable. Generally, for business is obtained from the local authorities, state government of the national government. Few industrial organizations and the corporations that are established well also give these kinds of grants, but are not desirable all the time.

The funding by way to small scale business is limited. Particular areas are targeted for this kind of funding. Principal amount is the main area where the capital investment is very less or not available. The small scale business grants are also provided for other business related works like husbandry, fishery and farming. It is also targeted towards manpower hiring, purchase of new equipments or machinery. If there is necessity of a building separately, then the small business grant will be intended for purchase of land and construction of the building. In the case of business that is established, the small business grants are provided for development and research and also for technology improvement. The small business grants are also given for enhancement of international trading to the foreign exports.

The business plan should be drafted well and to be submitted to get the small business grant. Generally, the loan contributor for these small business grants is the SBA called as the Small Business Administration. It is also important for the borrower to clearly mention the places where the grant money will be utilized as the expectation is that around 50% to 85% of the grant money should be invested for the business purpose. The grant is given based on this guarantee of investment in business. Once the grant is approved, analysis is done on the credit and concluding report has to be submitted to the lender. Then the amount will be disbursed directly to the owner of the business by the lender.

Small Business Grant Source:

Learn the application procedures, various funding sources for specific types of businesses and eligibility criteria for small business grants.

Source by David Hensley