Find the right subsidy with us
You have started your own business. Great! However, finding funding to support your efforts is always difficult. How do you survive without having enough investors and supporters believing in your idea? Confused about all the different types of subsidies you can apply for? Worry no more – this article will shed a light on everything that you need to know about the existing subsidy types.
Direct and Indirect subsidies
As the name already gives away Direct subsidies are directly paid to a given individual, group or an organization. On the other hand, Indirect subsidies do not have a fixed monetary value and they don’t involve direct cash expenditure. An example of an Indirect subsidy would be a price reduction on a good or service (e.g. WBSO, EIA, MIA).
Production and Consumption subsidies
Let’s say you’re a farmer trying to sell crops to supermarkets. However, you need financial help to generate the sales. In this case you’d apply for a Production subsidy. This type of subsidy encourages production through partially compensating for the costs of production or the losses made along the business journey. As you can imagine, if you’re a household having issues affording food, water, electricity and education, you are encouraged to apply for a Consumption subsidy. Especially subsidies for one’s education are popular, because studying is becoming increasingly expensive. This subsidy will help any household afford whatever they need to survive.
Export and Import subsidies
Countries or states obviously want to support their exports (this balances the economy), so the government subsidizes the export costs. This benefits the producers of the exported goods or services, since they face lower production costs. Then there are also Import subsidies, which are said to be rarer. This is governmental support for imported products, which lowers the product price for consumers.
Transport and Agricultural subsidies
In the Benelux (Belgium, The Netherlands and Luxembourg) area, transport; both private and public, tends to be relatively expensive. This is why Transport subsidies have been put in place in Luxembourg. Right now, all public transport is ‘free’ over there (though the income taxes in Luxembourg are said to be one of the highest in Europe). In short, Transport subsidies decrease the costs of production incurred while building new infrastructures to reduce pollution and congestion. Agricultural subsidies work in the same manner. The government increases farmers’ income and so increases the supply and reduces the cost of agricultural commodities. Hence, both the farmer and the consumer are advantaged, since the farmer gets incentives to produce more crops and consumers get the crops at a lower price.
Investment, cost and favorable loan subsidies
These subsidy types are most likely to be attractive to businesses. Investment subsidies accelerate the gain of the required investment capital. Their form include non-repayable grants, debt, or the assumption of warranties. If you’re a startup wanting to scale-up, the best option here are grants, since they are free cash that does not involve any repayment obligations or bonds to be signed. Cost subsidies, like the name states, cover only specific expenses incurred while executing a project. Finally, Favorable Loan subsidies are basically loans provided at a favorable interest rate and repay period. Apparently, this subsidy option saves businesses and individuals money in the long-run.
Which subsidy is best for you?
By now you should know which subsidy to apply for. Go ahead and check out our website and apply for your funding now! Likewise, you can browse through the subsidy calendar to see if there’s anything that sparks your interest. When browsing through the subsidies, keep in mind which type of subsidy you’d like/need and if necessary, check this article again for definitions. Or would you rather read about how other innovators got their subsidy? Read this article and get inspired. Good luck with your applications and if you have any questions, don’t hesitate to contact us.