RECOVERABLE
FORGIVABLE
GRANTS




RECOVERABLE GRANTS

HOW RECOVERABLE GRANTS WORK

FORGIVABLE GRANTS

RECOVERABLE GRANT LINKS



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SECTION 1



RECOVERABLE
GRANTS




Funds provided by a philanthropist to fulfill
a role similar to equity. A recoverable grant
may include an agreement to treat the investment
as a grant if the enterprise is not successful,
but to repay the investor if the enterprise
meets with success.



A Glossary of Loan Terms
http://www.gdrc.org/icm/loan-glossary.html



Recoverable grants



Recoverable grants, (which are also known
as forgivable loans), are a unique type of
grant where a philanthropist or non-profit
organization decides to lend out money on
the hope that an entrepreneur will be
successful.

If an entrepreneur is not successful, they
donít have to pay anything back, regardless
of how much they originally borrowed.

Two types of options are available with
recoverable grants: put options or call
options. With the put option, a grant
maker is given payment when the
entrepreneur achieves a particular
milestone.

For instance, if the put option specifies
repayment when the business earns a million
dollars, the grantee owes nothing until that
milestone is reached.

The call option works in an opposite manner.
Basically, the grantee has a financial
obligation to the loan until they achieve a
certain milestone.

When this happens, they can request that the
rest of their obligation become eliminated.
Usually the grant-maker obliges because they
already received the funds they were expecting.



Recoverable Grants: The Basics
http://www.digital-women.com / free-grant-money / government-grants / recoverable-grants.html



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SECTION 2



HOW
RECOVERABLE
GRANTS
WORK?




How do recoverable grant programs work?

Recoverable grants, sometimes called
forgiveable loans, are often used to
provide money for feasibility studies,
architectural work, and other facilities
predevelopment costs before long-term
funding sources have been identified.

Funders generally require recipients
to pay the money back if they secure
construction or permanent financing,
but forgive the money if the project
does not go through due to forces
beyond the recipientsí control.

Most of the programs contacted for
this study cap their recoverable
grants at $50,000 or less and do
not charge interest.

Traditional loan security is rarely
required, but some programs require
recipients to provide matching funds
or in-kind services.




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SECTION 3



FORGIVABLE
LOANS




Forgivable loans are loans that the
lender undertakes to waive repayment
of under certain prescribed conditions.



Forgivable loans
http://www.unctad.org/en/docs/c2isard16a3.en.pdf



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SECTION 4



RECOVERABLE
GRANTS
LOANS
LINKS




Business Assistance
http://www.chandleraz.gov/default.aspx?pageid=311

Draft Guidelines for Recoverable Grants for Litigation Costs
http://www.foreclosurelegalassistance.org / documents / Guidelines%20for%20Forec...

Recoverable Grants: The Basics - Loans for Women
http://www.digital-women.com / free-grant-money / government-grants / recoverable-grants.html

Small Business Government Grants for Minorities & Women | eHow.com
http://www.ehow.com/list_7252389_small-government-grants-minorities-women.html



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