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Small business & start-up grants for 2018: the definitive guide

by John Marshall
Published on 19 June, 2018
brunodionmarsh

Business Grant

Getting a new business or project off the ground can be full of challenges, with ‘finding funding’ named as one of biggest obstacles for many entrepreneurs.

There are many different funding options available to small business owners, but none are quite as valuable or sought after as a small business grant.

There are many different types of grants and, for the most part, they do not need to be paid back. This makes them the holy grail of finance options; they are, however, notoriously difficult to secure.

What is a grant, exactly?

Grants can offer start-ups and entrepreneurs the cash injection they need to get their new project idea off the ground.

Most grants are awarded by government bodies, but some organisations also offer grants to new businesses.

Grants come in all different shapes and sizes, ranging from hundreds to many thousands of pounds.

Each grant opportunity comes with its own set of eligibility requirements, which can be very niche.

Government departments, authorities, and organisations providing grants usually offer them to entrepreneurs and businesses that mirror their own interests and objectives.

Whilst most grants don’t require any money to be repaid, there are usually attractive repayment terms in place when its required.

Some different types of grants for small businesses and start-ups

Most people understand the term ‘grant’ to basically mean ‘free money’ that does not need to be repaid.

While this is how many grants work, there are alternative types of grant that can also provide value to your business.

Direct grant

Direct grants are cash gifts that don’t need to be repaid.  To be eligible for a direct grant, you will usually be required to agree to fund around 50% of the total project cost yourself.

Soft loan

You are required to pay back soft loans, but the terms of repayment are more lenient than those under ‘normal’ circumstances. There may be no interest to pay or a generous amount of time before repayments are required.

Equity finance

Equity finance is provided by investors in return for an equity share in your business.  Government incentives such as the Enterprise Investment Scheme encourage investors to financially back small businesses by providing tax relief.

What kinds of small businesses and start-ups qualify for a grant?

There are thousands of grant schemes available to entrepreneurs and small businesses in the UK.

Each of these grants has its own set of criteria for eligibility, which may include the location of the business, its size, how long you’ve been operating, your industry, and your project details.

Bodies and organisations offering grants usually specify one or more programmes to which you can apply for the funding.  These programmes have specific objectives, which your business or project will need to aid with to be eligible to apply.

With this in mind, there are certain industries and project types that will have a better chance of securing a grant than others.  Generally, grants are given to businesses or projects that will add value to a particular industry or community.

For example, many local councils provide funding to local businesses to spur economic growth and job creation in the area.

There are also a greater number of grants available for projects that relate to scientific, environmental and medical research than there are to say, retail businesses.

Where can I get a grant for my small business or start-up?

Government

A very large proportion of the grants available to businesses and entrepreneurs are funded by the government.  There are hundreds of different opportunities available at any given time, from nationwide initiatives to small locally-run schemes.

Part of the government’s funding goes on grant schemes that are run by local authorities, which are most often geared towards projects or businesses that will benefit their community.

To help you to narrow down your search for a suitable opportunity, the UK government’s Business Finance Support Finder tool allows you to search for funding options based on a set of criteria (including business stage, industry, and number of employees).

If you’re located in Scotland, Wales or Northern Ireland, each of these regions has its own online search tool to help you identify relevant grant opportunity.

EU

The EU offers business support and grants to SMEs both directly and through programmes managed at a national level.  Grants are offered to businesses whose projects ideas support or further the interests of an EU programme or policy.

You can find out more about EU funding opportunities in the access to finance section of their website.

Local enterprise partnerships

Local enterprise partnerships (LEPs) are non-statutory partnerships between the public sector (usually local authorities) and the private sector that aim to promote economic growth and jobs in a local area.

There are currently 39 LEPs of varying sizes up and down the country.  To find out if you have a local LEP and what funding opportunities are available, visit The LEP Network website here.

Organisations

Some large organisations and trusts also offer grants to businesses that further their interests or promote innovation in their industry.  A few of these include The British Fashion Council, The Medical Research Council, The Arts Council, The Carpenters’ Company, The Marine Society, OneFamily Foundation and the Savoy Educational Trust.

The top business grants available in 2018

Grants for people aged under 30

The Prince’s Trust

  • Offers young people aged 18 – 30 training, tools, and mentoring to help them start their own business.
  • Small start-up business grants are available in special circumstances.
  • Low-interest start-up loans also available.

O2 the environment now

  • Funding available for young people aged 17-24 with a project idea that uses digital technology to solve an environmental issue.
  • Includes mentoring, work experience and insight days with industry professionals.

Grants for graduates

Be Inspired at Staffordshire University

  • A year-long programme of support including full initial training, a business network, industry mentoring workshops and grants.

Grants for the unemployed

New Enterprise Allowance

Top business grants by industry

Grants in science and tech

CRACK IT – challenges

  • Funding for collaborations between industry, academics and SMEs to solve business and scientific challenges.

Catalyst Programme

  • Run by the University of Southampton, this programme accepts applications for grants from start-ups focussed on scientific or tech breakthroughs.

Grants in health and medicine

Small business research initiative for health care

  • Offers grants to small businesses developing solutions for specific health needs and NHS challenges.

Innovative medicines initiative

  • Available to organisations and SMEs who wish to improve health outcomes by speeding up the development of, and patient access to, innovative medicines.

Grants for community projects

Transform Aging

  • A range of grants and support services available to suit social entrepreneurs with different levels of experience.
  • To be in with a chance of winning a grant your project idea should tackle one of Transform Aging’s 6 innovation briefs.

Big Lottery Fund

  • Grants available to social entrepreneurs with project ideas for improving local communities.
  • Suitable for community and voluntary organisations
  • Funding available for projects all across England, Scotland, Wales and Northern Ireland.

Grants for product innovation

Innovate UK

  • Funding available for the development of innovative new technologies by businesses of all sizes.
  • Grants of between £25,000 and £10m available.

 Grants in creative industries

Arts Council project grants

  • Funding available for projects that help the Arts Council achieve their mission ‘great art and culture for everyone’.
  • Available to artists, communities, initiatives and cultural organisations.

QEST Funding

  • Funds training and education in craft skills.
  • Available to individuals for scholarships and businesses to employ apprentices.

Grants for environmental projects

Forestry Commission

  • Grant available for projects that help to expand, protect, and promote the sustainable management of woodlands.

Energy Entrepreneurs Fund

  • Funding to support the development of technologies, products and processes in energy efficiency, power generation and storage.
  • Available to small and medium-sized enterprises including start-ups.

Grants in childcare

Childcare business grants scheme

  • Grants funded by the Department for Education to cover the costs of setting up a new childcare business.
  • Offers a universal award of £300 for new childminder businesses in England.

Grants in tourism

Discover England Fund

  • Grants awarded to projects that drive growth in England’s tourism industry.
  • Available for small-scale projects and large-scale collaborative projects.

Grants in construction

Construction Industry Training Board grants scheme

  • Government-funded training grants available to employers in the construction industry.
  • Grants available to develop construction skills and maintain health and safety standards.

Grants for equipment, tools, training and resources

Better broadband subsidy scheme

  • Subsidised broadband installation for businesses that can’t access an affordable broadband service with a speed of at least 2MB per second.
  • Grants of up to £350 available.

Gigabit broadband voucher scheme

  • Grants available to put towards upgrading business broadband to a high-speed connection.
  • Grants of up to £3,000 available to SMEs in England, Scotland, Wales and Northern Ireland.

Plug-in van grant

  • Government scheme to encourage haulage and transport businesses to use electric vehicles.
  • Business owners can receive a grant of 20% of the initial purchase price of an N2 or N3 class electric vehicle.

Tradeshow access programme

  • Eligible businesses can get funding to attend overseas trade shows.
  • Grant amount must be matched by the business’ own expenditure on exhibiting costs such as exhibition space costs and stand costs.

Carbon Trust Green Business Fund

  • Small and medium-sized businesses can receive grants to help cover the costs of energy efficiency assessments, training workshops, and equipment.
  • Grants of up to £5,000 available.

Applying for small business grants

How does it work?

So you’ve found a grant opportunity that appears to be the perfect match for your business or project idea. Now how do you then go about securing the funding?

It’s important to remember that applying for a grant is a lot like applying for a high-brow job vacancy — there’s no guaranteeing you will be awarded the money, no matter how well suited you think you are.  Competition is stiff when it comes to grants, and it could take a while to get a response on your application.

The application process varies greatly from one grant to the next, so check the details thoroughly and make sure that you get your application in with plenty of time to spare.

As a general rule, the more money on offer, the more complex the application process. So prepare yourself to jump through a lot of hoops if you’re eyeing a substantial small business grant.

If you’re applying for a regional grant there are usually fewer applicants and the response time is likely to be much quicker than when applying for something on a national level or from a European body.

Applying for a grant can be a slow and time-consuming process. But if you’re going to spend time doing it, you might as well to do it right.

What will I need to do it right?

The information you will be required to provide for each grant application will depend entirely on the scope of the funding and objective of the programme.

At the bare minimum you will need to have prepared the following:

  • Your business history: This gives an overview of who you are and your business’ achievements to date.  A successful business gives reassurance to the awarding body that funds will be used responsibly.
  • A comprehensive and up-to-date business plan: Your business plan should include detailed information about how the money would be put to good use. To make your application stand out, your standard business plan should be amended and tailored to emphasise how you will fulfil the grant programme’s objectives.
  • Details on how you would use the money: Providing a detailed and realistic account of how you would spend the grant money will give you a better chance of selection.

Top tips for applying for small business grants

  • Give yourself plenty of time to prepare your application.
  • Thoroughly research the fund-ers so that you can tailor your application accordingly.
  • Be realistic with the amount you ask for.
  • Specify how you will meet the funder’s objectives throughout your application.
  • Support your application with facts and figures as evidence.
  • Get your application in as close to the opening date as possible.

Whilst finding and applying for a grant can be a long and drawn out process, if your application is successful your efforts will be rewarded with the financial boost you need to make your project vision a reality.

John Marshall
brunodionmarsh
John Marshall is a writer, editor and strategist now based in London. His work features on TimeOut (New York), Thrillist, The Huffington Post, and MTV Networks, among others. Follow him @brunodionmarsh
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