// definition
Grant equivalent
Monetary value of an aid benefit
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Short definition
The monetary value of the advantage provided by support, such as a loan on favourable terms or an underpriced guarantee. For a loan, it depends on the difference from comparable financing terms and the discounting of cash flows. It differs from the principal lent, the exposure guaranteed and the lender’s eventual loss.
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Knowledge map
Intuition
Comparing public financing with appropriate market terms puts a value on the benefit received.
Primary sources
- HCSP, business support, July 2026Reference scopes and the grant-equivalent treatment of financial support.