What financial aid is typically offered to enterprises by governments and usually does not need to be repaid?

• A. Grant
• B. Loan
• C. Subsidy
• D. Investment

Answer: (A)

Grants are a form of financial aid provided by governments to support enterprises, typically aimed at fostering growth, innovation, or community development. The key feature of a grant is that it does not need to be repaid, making it an attractive option for businesses seeking financial support without the burden of debt.

Governments often allocate grants to specific sectors, projects, or initiatives to encourage entrepreneurship, job creation, or research and development. Unlike loans, which require repayment with interest, or investments that involve ownership stakes in exchange for capital, grants provide funds that enable enterprises to pursue their objectives without financial liability.

This characteristic of grants makes them particularly valuable for startups or small businesses that may have limited access to capital and want to minimize their financial risks as they grow. Subsidies, although beneficial, typically refer to reductions in costs rather than direct financial support and can sometimes require adherence to specific conditions, while investments involve a return expectation and are not offered for free.