→ Governments provide financial and non-financial support to help new businesses start and grow
Grants
→ Definition:
→ Money given by the government that does not need to be repaid
→ Examples:
→ Start-up grants, innovation grants, regional development grants
→ Analysis:
→ Reduces initial financial burden → easier to start a business
→ Encourages entrepreneurs to take risks and invest in new ideas
→ Evaluation:
→ Limited availability → not all businesses receive grants
→ Misuse of funds is possible if not properly monitored
Advice and Information
→ Government agencies provide guidance and support services
→ Examples:
→ Business advisory centres, online resources, mentoring programmes
→ Analysis:
→ Helps entrepreneurs make better decisions
→ Reduces chances of failure due to lack of knowledge
→ Evaluation:
→ Quality of advice may vary
→ Some entrepreneurs may not fully utilise available support
Low-cost Loans
→ Definition:
→ Loans offered at lower interest rates than commercial banks
→ Examples:
→ Government-backed loans for small businesses and start-ups
→ Analysis:
→ Makes finance more accessible → supports business expansion
→ Lower interest reduces repayment burden
→ Evaluation:
→ Loans must still be repaid → financial risk remains
→ Poor financial management may lead to debt problems
Training Schemes
→ Programmes to develop skills and knowledge needed to run a business
→ Examples:
→ Entrepreneurship training, financial management courses, vocational training
→ Analysis:
→ Improves managerial and technical skills → increases chances of success
→ Builds confidence and capability among entrepreneurs
→ Evaluation:
→ Training may be time-consuming
→ Not all participants apply skills effectively in real situations
Other Forms of Support (Additional Examples)
→ Tax incentives (e.g., reduced taxes for new businesses)
→ Subsidies to reduce costs of production
→ Infrastructure support (industrial estates, technology parks)
→ Analysis:
→ Reduces operating costs → improves profitability
→ Encourages business growth and investment
→ Evaluation:
→ Costly for the government
→ Benefits may be unevenly distributed