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.
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.
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 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.
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 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.
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.
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.
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 (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.
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.
Grants in science and tech
Grants in creative industries
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.
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:
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.