Final answer:
Grants are special funds designed to aid businesses without the need for repayment. They differ from personal funding by the business owner, loans, angel investments, or reinvestment of business earnings.
Step-by-step explanation:
Grants are special funds that are neither equity nor debt, do not require repayment, and are designed to aid businesses in specific areas. For many small businesses, the original source of funding is usually from the business owner who may cover startup costs using personal savings or through borrowing money, potentially by using assets like a home as collateral.
In some situations, businesses might also receive investments from angel investors, who provide capital at an early development stage of the company in exchange for a portion of ownership in the business. Additionally, some firms may choose to reinvest their earnings back into the business as a method of funding. However, neither angel investments nor reinvested earnings fit the definition of grants, as the former is equity and the latter is internal financing.