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How does government support businesses

Updated: Jul 1, 2023

Government supports businesses by providing

  1. Grants

  2. Tax incentives

  3. Low-cost loans

  4. Facilities or rental free premises

  5. Training support


Grants are financial funds that does not require a repayment. As such they are the most favoured support a business could get from the government as it can be used to increase their cashflow and increase survival. They are considered as subsidies by the government.

Tax incentives

Tax incentives are what most governments are likely to provide to start-ups. Tax incentives or tax breaks will enable businesses to save the tax amount that were supposed to be paid as retained profits - enabling the business to use it to grow its businesses.

Low-cost Loans

Low-cost loans are also a good source of support from governments that will help reduce the firm's expenditure on interest.

Facilities or rental free premises

Governments may designate certain areas or build a facility that charges very low or no rental for start-ups to set up shop so that these businesses can save on rental and reduce cost.

Training support

To encourage the growth of certain industries, governments may provide entrepreneurial or skills training to businesses from the industries the government aim to develop.


  1. Government Economic Objectives


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