Loans and Financing

Governments also provide financial assistance to businesses through loans with low or no interest charges.

Businesses usually benefit from this type of financial assistance because the interest cost related to the project's financing is usually very high and frequently represents a factor that slows down the development and expansion of otherwise promising businesses, of a project that could otherwise have seen great success.

The reimbursement terms of this type of financing are structured to limit other obstacles that businesses face when searching for funds to develop their projects.

These terms vary depending on the program of managing organization, but have similar elements such as:

• Flexibility concerning the application of reimbursement terms;
• Deferral of capital installments;
• Reimbursement holidays on fixed or occasional capital;
• In some cases, holidays of several years may be granted before having to reimburse the capital obtained. This reimbursement can also be spread over a variable timeframe that can last many years;
• Many organizations, offering low interest rates, will establish the rate according to the business' profitability level, allowing the business to finance its projects based on its actual profitability level.