Grant Funding Sources for SMEs
Small and medium-sized enterprises (SMEs) represent 99% of all businesses in the EU and their dynamism is a key element of a successful economy. However, one of the most important issues facing biomedical SMEs is their difficulty accessing finance for research and innovation activities. Loans and grants are the two most common ways to obtain funding. The main difference between a grant and a loan is repayment. A loan requires you to repay the money you borrow, whereas a grant does not. Grants are, essentially, a gift. In other words, they are non-repayable and may be awarded by government departments, trusts, corporations, or philanthropists and given to individuals, businesses, educational institutions, or non-profits. Loans are generally given by banks to both individuals and businesses, but private lenders or individuals may also offer loans.
The Advantages of a Grant
Grants offer a number of benefits:
- No repayment necessary: Repayment is the fundamental difference between a grant and a loan, and also what makes grants more valuable than loans.
- No risk: Grants are a no-risk way to obtain the financing. If a loan is not repaid, the credit rating and assets will be put in jeopardy.
- Non-diluting: similar to loans, grants are non-dilutive and not require the sale of the company’s voting equity. They allows founding teams and existing shareholders to retain company ownership and control.
Medical Grants Pervushina & Partners works to improve the granr funding environment for small businesses in Europe and developed new information services that is able to generate individual grants listing using pooled 10 biggest international funding databases. According to the statistical evaluation of 38 european SMEs we could identify in 2018 following top 3 sources for successful grant funding:
Philanthropic and industrial Grant Funding Sources
Donations from philanthropists and private foundations as well as non-diluting industrial donations are increasingly finding their way into biomedical research.
TOP 2 Public non-governmental
Fundings made by non-profits and patient advocacy groups.
Top 1 Public intergovernmental or governmental
Intergovernmental (e.g. funding Programmes of the European Commission) and national governmental funding are still the most important sources of the public reserch and innovation grants.