If you’re considering applying for a grant to provide your business with valuable financial support, it’s important to be aware of how grants are allocated and how likely you are to get one. Here’s everything you need to know.
Grant funding is when a business is awarded a sum of money by the Government or a private organisation to use for a specific purpose. Unlike a business loan, business grants do not need to be repaid, and no interest will be charged. You also won’t need to give away a share of your business in exchange.
Some grants will require a level of matched funding for the project, however, so be sure to check. If that’s the case, you will be required to invest the equivalent amount in your business. So if you’ve been given a grant for £10,000, for example, you will also need to invest £10,000.
There are hundreds of grants available in the UK, but they will usually be aimed at specific industries, community groups or types of business. You might be able to get a grant for any of the following:
There are also 38 Local Enterprise Partnerships (LEPs) across England. These are business led partnerships between local authorities and businesses that provide business funding, support and guidance in their local areas.
Then there are R&D Tax Credits which are provided by the Government to encourage businesses to carry out research and development projects related to science or technology.
The Government will generally only allocate funding to businesses that meet specific requirements. For example, your business might need to be:
The decision will also be based on factors such as the type of business you run and what sector you’re in. Grants will usually only be given to meet a specific goal or support a specific project, so you’ll need to be able to show how the grant will help your business to achieve its aim.
Bear in mind that many Government-backed grants usually align with specific policies or targets. These might include reaching net zero or ‘levelling up’.
Although there are more than 200 Government grants available for small businesses in the UK, competition to get one is fierce. Most grants are awarded to help launch start-ups, with fewer grants available for more established businesses.
The number of applicants that are successful will depend on the type of grant and the size of the funding pot. If it’s relatively small or if the eligibility criteria is very niche, only a handful of businesses might get funding.
On the flipside, grants that cover the loss of income, for instance, might be available to many more businesses. As an example, Government figures show that during the Covid-19 pandemic, thousands of smaller businesses across the whole of England received £21.3 billion through the Government’s Covid-19 Local Authority Business Support Grants scheme.
You can search online for grants using the Government’s business finance tool as well as regional funding portals. It’s crucial that you check the eligibility criteria for each grant carefully to ensure you qualify before you apply. If you do, and you’re happy to apply, you will need to have all the required details and documents to hand.
For a start, you should have a solid and realistic business plan with sales projections, cash flow and loss forecasts. Make sure your business plan is also tailored for the grant you’re applying for. If you are already trading, you’ll also need to provide bank statements as evidence of your finances.
Prepare your application as early as you can to ensure you don’t miss the deadline. Understand why the grant is being awarded and make sure your application refers to these objectives. Explain exactly what your business will use the money for and what success looks like. Be as specific as you can.
It can also be worth getting a second opinion from a mentor, senior colleague or expert and make sure you proofread and spell check your application before you submit it.
If you’d like additional support with finding the right business grant for you and assistance in applying, we can help through the team at our trusted partner Swoop.
