Know the differences between government grants and loans

Do you or your family need financial help to cover a personal need? Do you work for a nonprofit organization that needs assistance completing a project? Maybe you’ve heard that the government offers financial help, but you don’t know what type of assistance you could access and where to find out. The first thing you should be clear about is that there are two types of financial aid offered by the Government and that each of them has different eligibility requirements.

Subsidies or “grants”

Subsidies or “grants” are financial aid to finance projects or to provide public services, and are only available to non-profit organizations, universities, states and local governments. Note that:

  • Most government grant funding opportunities are not for individuals.
  • If you find information on the internet or elsewhere claiming that the government offers grants or “free money” to people to start a business or help pay bills, do not believe it, it may be a scam.
  • If you’re part of an organization that you think may be eligible for a US Government grant, find free information about available grants, tips, and tools to help you through the application process .

loans

The Government makes loans to individuals for specific purposes, such as to help finance education, to assist with housing needs, or in response to an emergency or crisis. Note that: 

  • Loans, unlike grants, must be repaid in payments that are often with interest.
  • If what you need is money to cover a personal need, you may be eligible for one of the loans granted by the Government.
  • To search for government loans, use the federal government’s free official website Gov Loans.gov, where you can access information on loans for agriculture, business, disaster assistance, education, housing, and veterans.

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