Lendbug is a lending company that provides business loans to small business owners and startups with funding options. Lendbug like many other lending companies has its terms and conditions when it comes to its eligibility criteria when it comes to providing customers with lending options. In this article, we shall be looking at the different ways grants are different from loans, and what funding option should be your go-to when you are starting or growing your business.
Lending companies are in the business of providing funds for individuals, businesses, and corporations on different fixed terms. This can range from short terms to long-term loans. Many of these lending companies have stipulated criteria that you have to meet as an individual, a business owner who is interested in borrowing money to start a business or project. However, unlike grants, not everyone can qualify for a loan from a lending company.
Grants, on the other hand, are free. You do not need to meet any criteria for repayment whatsoever. In many cases, grant issuing agencies do not specify how they want you to utilize the funds that you are getting from the grants that have been issued. In this article, we shall be reviewing seven ways that a grant is different from a loan, and showing ways to utilize the benefits of finding the ideal grants to help start a business or grow an existing one.
Lending Bug Funding Options
Lendbug is one lending company that we have chosen to compare the differences between loans and grants. Lendbug provides lending options from merchant cash advance to a business line of credit, commercial mortgage, equipment financing, SBA loan applications, and hard money lending. All of these options have stipulated terms that Lendbug hopes that you qualify for before the company provides you with loan options to help you start the business that you desire and much more.
For instance, if you are applying for a merchant cash advance, you would have to show your revenue, and a successive level of income, which usually would be from an established business. This may also apply to some other funding options that Lendbug has when it comes to creating the different requirements that are needed in the area of funding applications available. Whatever the case may be, the burden of proof is on the applicant to provide the details required to be able to qualify for funding from lending companies l like Lendbug.
Whatever lending option you choose to go with when it comes to the variety of services offered by Lendbug, it is important to understand the differences in service terms and learn ways of ensuring you meet the criteria for the option you are interested in. Lending Bug Inc provides lending bug mortgages that may be flexible for what you may be looking for, but you would have to take your time to explore your options to know which option works best for you.
Seven Ways Grants Are Different From Loans
You have learned about loans, how to apply for them, and the criteria that you have to meet to get your loans awarded. Now it’s time to see what grants have to offer. If you have wanted to start a business, a project, and have been in a position where you have needed funds to start, then you may have asked yourself this question: What exactly is a grant? Well, a grant is essentially free money that is provided by the government, individuals, organizations, and agencies to help support a mission, or a course of a venture.
Grants are not to be repaid, although many grants issuing agencies may require that the grant funds should be utilized in a specific way. Whatever the case may be, grants can be accessed through diverse channels, whether you are a for-profit or a nonprofit entity. Whatever the case may be, learning about grant options can help boost your options of getting the grant you need to make your business dreams a reality.
We have combined different ways that a grant is different from a loan to help you make an informed decision when it comes to finding funding for your business. Even if you have experienced the concept of loans at last login, and may not have had the best experience, we hope that trying out other options such as grant applications can help make the situation a lot better for you.
1. Loans are Repayable
When you get a loan from a bank, a loan company, or third-party loan establishments, you sign documentation that ensures that you have to pay the loan within the specified period of time. This is something that is binding between you and the loan servicer. However, for grants, there may not be any documentation signing required for you to get the grants you need for your business or the project you need the funding for.
2. Loans Come with Rates
Loans generally come with stipulated rates that you have to abide by. These rates in many cases may be unfavorable, however, for you to get funded, you would still have to agree to these terms and conditions that the loan companies have specified for their loan applications. Grants, on the other hand, have no rates. Grants come with full funding without the criteria of rates or agreement of repayment on fixed-term whether short or long as the case may be.
3. Loans May Pay Out in Advance
Loan companies may offer loan advances, which basically boils down to getting money before a paycheck, or an agreed time for repayment. Even if your loan service company is grace loan advance, you may still be required to pay up the advance that you have been provided with when the agreed time comes. However, grants do not function that way. Grants are mostly free money that you can get when at the specified date of the disbursement.
4. Loans May Require a Collateral
No double, many loan places may require collateral before you are loaned money to start a business, grow one you already have, or simply complete a project. Whatever the case may be, the lending companies may go to great lengths to make sure that they make demands of your new business, your income, properties, and whatever else you own to ensure that they get their money back. Grants on the other hand require no collateral of any kind.
5. Loans Have Short Term Loans
Loan companies tend to offer short terms loans where they focus on getting their money back in a short period. This can provide them with funding for other projects and other loans that may bring them even bigger revenue. This is something that can be quite challenging for a lot of people who may require a longer-term loan. However, the longer the term, the more expensive. Grants, on the other hand, do not require this criterion,m for you to be awarded grants.
6. Loans are Limited to Your Income
One of the criteria that loan companies consider when they are offering loans is how much they make. This is to determine how much they are going to provide you in the loan amount. If you do not make as much money, it would be quite challenging to get the loan companies to provide you with bigger loans, unless you have collateral you are willing to put down for the loan. Grants, on the other hand, do not function this way. You can get grants way bigger than your income or revenue in many cases.
7. Last, But Not the Least – Loans are Usually the Last Resort
Loans in many cases are the last resort for many business owners. Think about this, would you rather get a loan to start a business, or would you rather apply for a grant? Well, there you have it. Loans come with many criteria from income verification and limitations, to collateral, to short-term fixed loan requirements and others, however, applying for a grant can be quite freeing. Knowing that you do not have to repay the funding you got can put your heart at rest, and help you focus on growing your business.
Conclusion
There you have it! Loans are available for business owners if you do not mind the countless requirements, documentation, and paperwork you have to show to get funded. You can skip all of these by simply researching and finding ideal grants that meet your criteria and applying for them. If you have been turned down by loan companies in the past and would like to get funding to start a business or grow an existing one, you can reach out to our grant consultants who can help find you the business grant that fits your business needs today.