Grants without illusions. The real reasons for refusals and financing delays

A grant is not a fantasy but genuine, effective support for business growth. Every year thousands of companies apply to grant programmes, yet only some of them reach the final stage and receive financing. The reason lies not only in strong competition, but above all in typical mistakes when preparing documents, failing to meet programme requirements, or the absence of systematic communication with the grant provider.

In this article we look at several real stories of entrepreneurs who faced refusals or delays, and explain which factors most often stand in the way of receiving grant funds.

A farmer applied for grants many times but was always refused.

The reason is that the company, and the application it submits, do not meet the requirements of the grant programme.

Incorrect company segmentation

A fairly common case is where a grant programme states that the grant is for medium or small business, but applications come from sole traders or farms whose income is up to EUR 2 million — that is gross revenue (line ten of Form 2, by which annual revenue is calculated). "In other words, a small enterprise is one whose income starts from EUR 2 to 10 million. Without knowing these nuances, you may be refused participation in grant programmes. So you simply need to know your own segmentation," Iryna explains.

Incorrectly calculated own contribution

Before applying for a grant, you need to calculate the financial contribution the company makes to its community. If, for example, the company is installing a grain elevator, it must state how many farms or households will be able to dry and store grain through it.

The company won the grant but received no funds

Such cases are not isolated. A company assembles the document pack, prepares all the necessary papers, finds a programme, waits three months for a decision, wins the grant — and then receives no money. What can get in the way?

Discrepancies in the documents submitted to the fund or bank

"We won a grant for a company. The organisation providing the grant asked for an updated commercial offer, valid as of the current date. The entrepreneur called the factory, which sent an offer with a discount. As a result the grant application showed one amount and the updated offer another, and the fund or bank saw the discrepancy. The entrepreneur was refused, the grant was cancelled, and they had to apply all over again," Iryna Nikolaieva shares from practice.

No prompt communication with the fund

This applies especially to international funds. They may spend three to five months reviewing an application and then send a letter with a hundred questions, giving the company only three days to answer. Farmers do not always check their email, and an accountant may simply see it as spam. But if the company does not respond within three days, your application is cancelled and the funds go to the next company in the queue. "We have tried to rescue such cases, meeting funds abroad and explaining why the company was slow to respond," says Iryna.

A lack of patience in providing the full document pack

As banal as it sounds, this factor can also affect whether funds are received. Entrepreneurs simply run out of patience. "Let me tell you about one case," Iryna says. "We won a USD 5 million grant for a company in pig farming. The grant fund sent over a hundred questions clarifying the company's operations. We began answering, and over the following months more and more questions kept arriving from the fund. The owner's patience ran out and she was on the verge of abandoning the grant. Only in the sixth month did the company officially receive the grant agreement, which set out the amount won along with a note from the fund: 'Your company is the only one that made it to the end of preparing and collecting all the documents. We propose doubling your grant.' And the co-financing was not increased."

One company in the Vinnytsia region won a grant of over USD 20 million this autumn to build a processing plant. But it took them thirteen months to get to that result.

What does this mean for business?

These examples show that the key obstacles to grant financing are most often related not to the potential of the project itself, but to the technical, financial and communication aspects of preparing the application and managing the process after a positive decision.

It is a systematic approach to preparing documents, correct financial planning, compliance with programme requirements and professional communication with the grant provider that create the real conditions for receiving funds.