Access finance

Caribbean LGEs may be registered as non-profit organisations or for-profit businesses. LGEs can access different types of finance depending on the type of registration.

Types of finance for LGEs  

A grant is a quantity of money which has been gifted to an individual or company. Unlike a loan, you do not have to pay back a grant. The body awarding the grant may stipulate specific criteria for accessing the grant which detail who is eligible for the grant and the purpose it may be put to. Subventions are a grant of money in aid or support for operations, mostly given by the government. Grants and subventions are an important source of funding for non-profit organisations; for-profits are usually not eligible.

 

Many non-profit organisations rely on donations from individuals or organisations to fund their work. This includes gifts and bequests, and can be monetary or other (e.g., property, equipment, materials).

A loan is a quantity of money, which has been given to an individual or company, in exchange for repayment of the value or loan principal amount plus interest. A loan may be secured by collateral such as mortgage on a land or on assets or it may be unsecured such as a credit card. Loans can be accessed by for-profit or non-profit organisations.

Equity investments are made through the purchase of small portions of a for-profit company, known as shares or stocks. The shareholder becomes entitled to a portion of the profits or assets made by the company. These shares are typically traded on a stock exchange.

Angel investments are made through the provision of one-time investment of funds or ongoing funding to a for-profit company. These angel funders or private investors typically support early-stage businesses in exchange for a percentage ownership of or equity in the company.

Blended finance uses development funding (e.g., grants, low-interest loans) to mitigate investment risks and attract additional funds from private commercial sources which expect to get a financial return on their investments. Blended finance is the combination of different types of funding to support the initiative. Blended finance approaches can be used in funds created to support LGEs.

Check out featured sources of finance for LGEs

Search below to learn about some of the organisations which can provide financing to Caribbean LGEs.

Photo Credit: N. Leotaud