It's not just about closing investment rounds or the FFF (friends, family and fool) that entrepreneurs live. Sometimes technology startups use other ways to finance themselves that are not their close people or the representatives of venture capital.
Grants can be an interesting alternative for certain projects, although they have their peculiarities and usually only represent a percentage of the money needed by a company to advance or undertake certain activities. In this sense, they usually assume a complementary funding formula because it is rare for 100% of the money that is required to be given. If there is something characteristic of a grant, it is that they come from public bodies. They can be of all kinds, going from highest to lowest. They are granted by the European Union, the State, an Autonomous Community, a city council or institutions with a specific orientation or mission. They are, basically, aids.
Financial and other grants
Generally, when we talk about a grant, we talk about an economic or financial contribution, however, it can be of another kind. It is possible to receive them in kind, such as obtaining training or the transfer of land or property for a very low price or free of charge to start your business. Likewise, tax exemptions and even facilities to capitalize on your unemployment benefit when starting a business can also be included as grants. However, the most generalized meaning is that of grants that provide capital. Obtaining a grant is not always easy. Companies or projects must fit the requirements or conditions that are established. Aid, in addition, is usually granted for carrying out some type of social activity, research, innovation, etc. In other words, there are eligibility criteria. In addition, in many cases documents, reports, business plans, invoices, etc. are requested to justify that this money will go where you want to allocate and not to another place.
A grant is not the same as a loan
In many environments, both terms are confused, however, a grant has a very clear difference compared to a loan: those who receive it do not have to return that financial contribution, they are 'non-refund' or practically donations. This would only happen in an extraordinary way if fraud were detected or the money was not allocated to what was agreed. A loan or credit must be repaid and for this purpose an interest rate and certain repayment periods are set. It's common to have to pay a fee every month. In this sense, loans can be provided by public entities, but also by private entities, such as banks or banks. To guarantee their return, lenders may ask for guarantees, such as a guarantee. Loans have differential interest rates and, according to these, they are called soft or hard loans. Personal and business loans have higher interest rates, while home loans and educational loans are soft loans with low interest rates.
Some of the best-known grants for startups in Spain
· Neotec by CDTI: Grant of up to 250,000 euros for startups with a minimum of 6 months and a maximum of 3 years of experience. The startups that request it must be technologically based and highly innovative. · ACCIÓ Startup Capital: Grant of up to 75,000 euros for startups that are up to 18 months old and that have their headquarters in the territory of the Community of Catalonia.
