A grant is a sum of money awarded to your business from the government that you don’t have to pay back. It’s awarded to your business to assist in its development, often for a specific purpose.
Is it right for my business?
The pros of a government grant include that it’s non-repayable – you don’t have to return the money, or pay interest on it. You’re also not giving away equity in your business, as when winning investment.
However, there are some really important things to consider.
– The process of applying can be incredibly time-consuming and complicated; can you afford to sacrifice this time?
– Grants and awards are very competitive, so if you’re banking on winning one to develop your business idea it’s best to have a plan B
– Often criteria for the grants can be very niche; this can make it difficult to find one that you’re eligible for, and lead to you tweaking your idea. While changing your business isn’t necessarily a bad thing, if you’re doing it just to win the grant you should think twice
– A grant is unlikely to cover all your costs, and you might be expected to match the grant with your own funding
– Grants often come with conditions which state how you’re allowed to spend or allocate the money – so be aware that it might not be as simple as just receiving a lump sum.
– Grants are rarely allocated for just ‘starting a business’ – they will always be to contribute to a specific project or aim
Best areas for winning grants
There are some areas where grants are more readily available than others – does your business fit into one of these areas?
Energy and environment
With improving the world around us and saving energy a priority, there are schemes available for businesses creating products that will help save the world. There are also grants available to businesses that seek to become more environmentally-friendly, even for such small changes as improving insulation in your premises or office.
Improving trade links for the UK’s businesses is a key element to driving the economic recovery, so if you’ve been thinking of exporting there’s useful help from UK Trade & Investments to get you off the ground.
It’s a no-brainer really – to keep the UK competitive in a rapidly-evolving global tech market, we need to encourage the most innovative businesses to keep inventing. There are some fantastic opportunities out there for exciting tech businesses, so check out Innovate UK for up-to-date listings of the best opportunities.
What do you need to apply for a government grant?
Every grant will have different requirements, but you’ll always need:
– A business plan. Crucial for the body granting your loan to assess your business and see how the money will help you achieve your aims, a great business plan will help you stand out in the competitive world of winning grants and give you the best chance of being chosen. You should tailor your business plan to each grant application, the way you would a CV when applying for a job.
– An idea of how the money will be spent. You don’t have to know how every single penny will be spent, or to have the exact costs of everything, but you’ll need to have an idea of where the money will go. Research in advance as to where the hypothetical budget would go, and note allocate rough amounts.
Check your eligibility
Whether or not you are eligible for a grant will depend on various factors, such as:
– Business size and classification. The grant might only be available to a Limited Company, for example, or to a business with a certain amount of employees.
– Grant purpose. Do you have a clear idea of what the grant will be used for?
– Location. There will be regional grants available. Bear in mind that different locations are likely to be more competitive than others, such as London.
– Industry type. Many grants are industry-specific.
It’s not just money
When people think of grants they automatically think of FREE CASH. But, there are many non-cash grants available that can help your business, such as connectivity vouchers,funding towards employee costs,or innovation voucher schemes.
One fantastic resource for small businesses is the growth voucher scheme. This government programme gives businesses with 249 or fewer employees strategic advice on everything from cash flow to technology, and there are vouchers up to £2000 on offer towards the cost. For smaller businesses the Small Business Charter programme can help you grow, including getting you onto a free half-day workshop work £500.
Finding a grant
With literally hundreds of grants out there, how can you find the right one for you? A good place to start is the government’s own finance finder. This will help you filter by business size, industry, and the kind of support you’re interested in.
And don’t forget that while we’re not a government grant, the Virgin StartUp Loans scheme is one backed by the government, allowing us to offer lower interest than many business loans.
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