Government Loan Tips

A Federal Grant is a financial assistance given to a person, to carry out some form of charitable activity or for helping the public in some way. The Grant is released only with the condition that if the purpose for which the grant has been given is not fulfilled, as expected, the grantee makes himself liable for prosecution and legal proceedings. These Federal Grants are released only to State or County Governments or to a non-profit agency that comes under the Internal Revenue Service tax code. In short, Federal Grants are not given to individuals or small businesses. As an individual or a small business establishment, your scope for receiving a federal funding or loan, is restricted to State development agencies and you cannot qualify for a Federal Grant.In cases where a genuine cause of solving a neighborhood social or economic problem is involved, you need to form a non-profitable corporation and procure the 501C3 tax-exempt certificate, before applying for a Federal Grant.

There are different types of Federal Grants. Project Grants are awarded to research projects like medicinal or bio-tech or other such beneficial-to-public projects. Categorical Grants are very narrowly defined and are released for purposes that require the recipient to raise funds to match the funds released by the Federal Grant. Block Grants are granted to agencies that have a little more allowance as to the usage of the funds, than a Categorical Grant. Earmark Grants are congressional appropriations that cannot be competitively bid. But this, Earmark Grant, has come under a lot of criticism, as in many instances, members of congress have pressed for the release of these Grants to their home districts in favor of certain projects which benefited certain individuals or specific agencies.

Federal Grants are also available for other categories like housing, small business, women welfare and educational. Housing Grants are usually made available through HUD and an amount of $1 billion has been made available. However, individuals are not eligible or these grants and they have to seek the help of the local Government or other non-profitable agencies that come under the Internal Revenue Service tax code. Similarly, Federal Grants for women can also be sought with the help of the local government or a non-profitable corporation. Federal Pell Grants are nothing but educational loans which are awarded to students through their educational institutions. In order to qualify for this Grant, the student must establish his financial need and should not have received any bachelor’s degree. Considerable preparations are needed to apply for a Federal Grant. You have to make sure that you meet all the requirements including ensuring your readiness, before beginning the process of applying for the Grant. It is advisable to seek the help of an experienced and qualified ‘Grant writer’ instead of trying to apply by yourself.