There are many types of grant, ranging from a fixed amount of money (like a state grant) to a one-time grant. The major types of grants are defined below.
Fixed amount grant
This is the most common type of grant. For this type of grant, there is no limit to the amount of money you can receive as long as you are willing to put some money into your project and don’t end up with a grant because it can’t be repaid. For example, the state can provide you a grant of $1,000 to start a business. You can use that money to hire a lab technician, start a business plan, or start to develop software that will be used to sell the product or service in the long run. You can also use the grant to establish a professional liability insurance policies.
Fixed amount grants generally can only be received after your business has been developed.
Fixed amount grants, which can be limited to $10,000 to $25,000 per state, cannot be repaid at the end of the grant. The limitation applies even if the grant has already been applied for after the grant (for example, if you have applied for a grant with no cap, but the funding agency denies your application).
In general, you are not allowed to continue the development process of the project; instead you must file a waiver petition with the government or submit a proposal that includes details of the work that’s being done. You will be responsible for the cost of the equipment, professional services, and salaries of the consultants required to complete the work. In many cases, the business will receive no funding from the grant and you’ll have to make up the difference.
Pre- and preliminary grants allow for the use of technology that has been developed in the last year for research or product development. However, unlike the preliminary grants, these grants are not approved by the state.
Preliminary grants are also known as exploratory grants because they allow for some risk. For example, the grant may require you to get a small loan or equity, or it may require you to submit a proposal explaining how you intend to turn the research or product development you’re doing. For these reasons, preliminary grants are not considered to be grants unless they’re made to a corporation or to a group that’s a part of a company—in which case the project will be called a corporation grant.