How Does the Government Help New Businesses?

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How Does the Government Help New Businesses?

It is always beneficial for the governments to financially support new businesses and startups. This not only helps the businesses but also boosts the country's economy. However, government support depends on the kind of activity that the businesses are involved in and the location where they are based.  In this article, we will discuss the various measures governments take to support the new businesses.


Interest-free Loans

Interest-free loans or low-interest loans can help small businesses in retaining more profits. Low interests help in increasing the net profits of the companies. Net profits, the earnings after tax and interest, can be distributed among the shareholders or kept for business development like expansion or meeting the working capital requirements.


Loan Guarantee Programs

The government funds the loan guarantee programs as well, and if your business fails to generate enough revenue, then under these schemes, the government guarantees to pay a certain percentage of your bank loan. Commercial banks are likely to give loans to organizations with similar government backing.



Often grants are given in the form of one-time payments, and companies do not need to repay them. Due to this reason, grants are highly beneficial for startups.  The government uses the grants to stimulate economic activities in regions that are poor or for industries that are lagging.


Lower Taxes 

There are several government programs that help small businesses in retaining more profits by lowering the tax rates in their early years. This will help these businesses develop and expand in the future.


Free Rents 

In economically constrained areas or cities with high employment rates, the government can also allow startups to operate on lands owned by the state or use empty public buildings free of charge. The government may also allow the use of such properties at reasonable or below-market rates. While it makes for an attractive proposition for small businesses and startups, it also ensures the care and maintenance of such structures or buildings. Further, such programs can stimulate the economy of these targeted areas.


Free Employee Training 

Often, new entrepreneurs do not possess enough money or resources to train their employees in production, marketing, account keeping, etc. In such scenarios, government organizations provide a helping hand and assist in training the low-skilled workers. The government can either provide the services free or provide subsidies. 



You may have an idea for some new technology or a solution to a long persisting problem, but you are scared of it getting stolen. In that case, you must register your product at the US Patent and Trademark Office . You may also find a learning and resources section on their website, but for anything more complex, you must seek the help of an attorney.



If the economy is going through a bad recession, the government can help by providing work contracts or long-term clients to help startups keep their companies afloat. You can find an entire section of the SBA (U.S. Small Business Administration) website devoted to landing such government contracts.



If you are planning to start a business, then you must possess specific skills. You must have some idea regarding every aspect of running a business. From taxes to marketing, customer service, finance, insurance, etc., an entrepreneur must be at the helm of all these frontiers. While it is good to have some knowledge about all these areas, it is impossible to be an expert in them. Hence you can either hire an expert or get their advice. Many government programs help you get in touch with business experts who provide consultations free of charge. Normally, these experts charge hundreds of dollars, but with the government's free consultation programs,  their expertise and experience can become a valuable asset for a startup.


Apart from these, the government has many other methods of supporting the new businesses. Knowledge of such opportunities can be beneficial for business, especially in the initial stage.   

WomExperts Team

WomExperts Team

Hi there, welcome to WomELLE Blog! WomELLE vision is to enable positive change for women and our mission is to provide women with opportunities to improve their quality of life through self-development and community action.