You need to consider carefully whether a government grant or loan is for you. In short, yes, it can be worth getting a grant to fund your business. However, there is a caveat. It really depends on the size of your business. Grants are a great source of funding for new, developing and well-established small businesses. But you will need to invest time and resources into researching grants and then applying for them.
Grants are available nationally, regionally and locally. The government is an excellent source of finance.
There are lots of opportunities for funding – the challenge is obtaining one. There are lots of hoops to jump through during complex application procedures. And each grant comes with its own set of stipulations and criteria for applying.
In this blog we cover:
- Where to find grants and loans
- What types of grants are available?
- How to apply for a grant or loan
- 5 tips for getting a grant
Where to find grants and loans
A good place to start is with the UK government’s Business Support Finder. It’s an online resource from the Department for Business, Energy and Industrial Strategy the currently lists 168 schemes.
That’s a lot of options so it’s a good idea to contact a good commercial finance broker for advice.
The Business Support Finder allows you to search by the type of support you need, the stage your business is at, your industry, number of employees you have and your region.
What types of grant are available?
Government grants come in a variety of flavours. They can come in the form of cost reductions and free equipment, cash, direct grants, equity finance and soft loans.
Direct grants are cash advances to cover start-up costs including training and investment in equipment or giving you a helping hand into new markets. These grants include:
- Apprenticeship Grant – for smaller employers with fewer than 50 staff to assist in covering the cost of training an apprentice
- Grant for Business Investment – a discretionary scheme that provides a capital grant to support sustainable investment
- Tradeshow Access Programme – provides grant funding towards the costs of exhibiting and promoting your business overseas
- British Council Grants – funding opportunities for research, travel and workshops
Equity finance are not grants as such; they are schemes that offer tax relief on investment into new businesses. These schemes include:
- Seed Enterprise Investment Scheme (SEIS) – a venture capital scheme offering qualifying investors tax relief on investments into qualifying companies
- Enterprise Investment Scheme – provides investors with the opportunity to invest in and support smaller businesses that may not otherwise attract funding
Soft loans work differently to grants. They are loans with lower interest rates and better terms than you find through other sources of debt finance. Loan schemes include:
- BCRS Business Loans – loans of between £10,000 and £150,000 to help SMEs in specific regions develop and grow
- Enterprise Answers – loans and support for businesses in the North of England
- Fair Business Loans – unsecured loans for SMEs that have been refused mainstream funding
- Start-up Loan Scheme – Government-backed personal loan to individuals in the UK starting or growing a business in the UK
Grant competitions are grants that you can apply to assist in research and develop projects and are often time sensitive. They include:
- Innovate UK – a government body driving the development of science and technology innovations to drive the economy which runs funding competitions
- British Small Business Grants – a competition, currently closed but looking to re-start, which provides grants to successful entrants to grow their businesses
- Innovation loans – a loan programme for SMEs involved in late-stage innovation projects
- Rural Connected Communities
How to apply for a grant or loan
Because each scheme is different you will need check the criteria and terms of the loan or scheme as early as you can before you get too far down the road and waste a lot of time and effort that you could be putting in elsewhere.
Most grants are very specialist, or are specific to a region or community, so you need to make sure the grants you are looking at are suited to your purpose and, again, that you meet the criteria for the loan.
5 tips to help you secure a grant
- Contact the grant body to assess your chances of a successful application
- Read the grant objectives and tailor your application to match them
- Make sure that you have a robust business plan in place
- Be clear on the purpose of the grant and show in your application how it will help you grow your business
- You have a better chance of succeeding in obtaining a grant if you apply as close to the launch of a scheme as possible
It’s definitely worth applying for the right grant to help your business grow and develop. Just make sure you apply for the right ones for which qualify.