Question

This week you learned about Capital Financing for Health Care Organizations. One specific way was the issuance of BONDS. Another way of gaining capital is by obtaining GRANTS.

--Discuss the two processes (bonds/grants).

--How do they differ, discuss the advantages and disadvantages.

Answer 1

A quantity of money given by the organization, government, family or person for a specific purpose is known as a grant. Based on the conditions, the grant money may or may not be returned. A huge money can be raised through one proposal only and it also helps in instant credibility and public exposure of the company. Government grants come with a lot of rules and regulations and hence to avoid misuse, it becomes a lengthy process to obtain one.

A bond is a fixed income investment in which an investor loans money to an entity which borrows the funds for a defined period of time at a variable or fixed interest rate. So when a company needs money, they issue bond which is bought by the investor at a certain interest rate for a defined period of time. It is mandatory fot the bond issuing company to pay back the amount to investor with the interest.