Tiêu đề Section 5.pdf ✅

AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 1 SECTION 5 8 MARKS 8 MARKS / (M/J 2023, V2), Q5, a Q. Analyse two benefits to a business of government grants as a source of finance. [8] ECR [8/8 MARKS]
AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 2

AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 4 FULL ANSWER Source of finance for businesses provided by grant giving agencies such as a central government. (2) These are often given to small businesses or those wanting to expand in developing regions. (3) They are often given with conditions attached such as a target number of jobs to be created. If such conditions are met, such grants do not have to be repaid. The first benefit of government grants and subsidies is that they typically do not need to be repaid, unlike loans or other debt instruments that come with interest obligations. This characteristic prevents an increase in the debt burden of the business, enabling it to operate more risk-free. As a result of this reduced financial pressure, businesses can afford to take on more risks, focus on innovation, and develop sustainable and high-quality products. This results in improving competitiveness and ensures the business maintains a sustainable edge in the market, leveraging the "free money" nature of grants to enhance long-term growth. Another benefit of a government grant is that it helps the original owners to retain control of their business. Unlike issuing shares in a public limited company or seeking funding from investors, which can dilute ownership and decision-making authority. Retaining control allows the owner to freely implement their vision and set clear objectives, which can positively impact worker motivation and performance. This leads to higher productivity, improved customer service, and increased customer loyalty, all of which contribute to achieving long-term business success in terms of higher sales and increased market share. This contributes to long-term profits.