How to Know if You Need a Grant or Loan for Your Busines

Business Funding Made Simpler

When you're just starting a business or trying to grow one, money matters. A lot. But figuring out how to get that money—and which option is best—can feel confusing. Should you apply for a grant? Should you get a small business loan? What's even the difference?

If you're stuck on how to fund your next move, you're not alone. Many small business owners, side hustlers, and freelancers hit this roadblock. But the good news is there’s a simple way to figure it out: ask the right questions and use the right tools.

What’s the Difference Between a Grant and a Loan?

Let’s keep it simple:

• Grants are free money you don’t have to pay back. They usually come from the government, nonprofits, or companies that want to support certain kinds of businesses.

• Loans are borrowed money you do have to pay back—with interest. They often come from banks, online lenders, or credit unions.

So which one is right for you? It depends on your business, your needs, and your financial situation.

5 Questions to Help You Decide

Here are some key things to ask yourself:

1. How fast do I need the money?

   • Grants take time. There are applications, deadlines, and approval processes.

   • Loans can be faster, especially online loans.

2. Can I qualify for a grant?

   • Grants often focus on certain people (like women, veterans, or minorities) or industries (like tech or community services).

   • If you don’t fit the requirements, you may not be eligible.

3. Can I afford loan payments?

   • Be honest. If your income is unstable or your business is brand new, loan payments can be risky.

   • Grants = no monthly bill. Loans = regular payments, no matter how your sales are doing.

4. What do I need the money for?

   • Some grants only fund certain things like marketing, equipment, or hiring.

   • Loans usually let you spend how you want, but you’re responsible for repayment.

5. Do I have time to apply?

   • Some grants have long, competitive applications.

   • Loans may require less paperwork, but still need credit checks and documents.

Common Misconceptions About Business Grants and Loans

• "Grants are easy money." Not true. Many people apply, and only a few get selected. You need a solid application.

• "Loans are only for big companies." Nope. There are loans for startups, freelancers, and microbusinesses too.

• "I need perfect credit to get a loan." Not always. Some lenders look at your business history or revenue instead of just your credit score.

What to Do if You’re Still Not Sure

It’s totally normal to feel stuck. That’s why our created the Business Funding Quiz. This free, fast tool helps you figure out the best path based on your needs.

Whether you need money to launch a product, cover expenses, or grow your team, this quiz asks simple questions and gives you a clear result: grant or loan. It even points you to specific types of funding to explore next.

The quiz only takes a few minutes and can help you:

• Save time researching options that don’t fit

• Feel more confident in your next steps

• Avoid common funding mistakes

Smart Tips Before You Apply for Anything

• Get organized. Have a basic business plan, your EIN, and your income/expense numbers ready.

• Know your credit score. This helps if you end up applying for a loan.

• Watch for scams. Never pay to apply for a grant.

• Keep trying. If you don’t get approved right away, don’t quit. New grants and lenders open up every month.

The Bottom Line

Finding the right funding doesn’t have to be overwhelming. It’s about knowing your business, your goals, and your comfort level with risk. If you want money you don’t have to repay, grants are great—but competitive. If you need quick cash with more flexibility, loans might be the way to go.

Ready to find the best option for you?

👉🏾Take the Business Funding Quiz now and get personalized guidance on your next move.

Whether you're launching a side hustle, scaling your business, or just exploring your options, this quiz is the first step to funding smarter.

You've got the vision. Let us help you fund it.