SBA grants are best described as free money that does not have to be paid back.

• A. They require repayment with interest
• B. They are free money that does not have to be paid back
• C. They require stake in the company
• D. They are loans

Answer: (B)

Grants provide funding that you do not have to repay, as long as you meet the grant’s terms. That non-repayable nature is what makes grants distinct from other financing. They’re awarded for specific purposes, like research or job creation, and often come with reporting or performance requirements. In contrast, loans must be paid back with interest, and equity financing involves giving up a stake in the company. So the best description captures the idea that grants are funding you don’t have to repay, even though there may be conditions tied to how you use the money.