1. Where to find government grants for new businesses
Government grants are available for UK businesses, as well as via the Welsh and Northern Ireland Assemblies, and from the Scottish Parliament. If you’re starting a UK business, begin with the useful Business Finance Support Finder. The Welsh government has access to a similar list of grants at its Business Grants website. Enterprise Ireland has access to funding for small businesses up to larger enterprises, while the Scottish government’s Funding Opportunities website provides access to over 600 grants and funding options.
2. What type of new business grants are available?
Government grants are available in all kinds of forms – from reduced costs and free equipment, to cash awards to help your new business grow. Generally, government grants are either a direct grant, equity finance or a soft loan.
• Direct grant – this is money given to your new business to cover start-up essentials such as training, investment in equipment, or reaching new markets such as overseas exports. Most grants will expect your business to provide 50% of the value of the grant, but funds of up to £0.5m are available depending on your business sector.
• Equity finance – not strictly a grant, some schemes such as the Seed Enterprise Investment Scheme offer up to 50% reduction in income tax on investments made in new businesses up to £100,000. Businesses have to be less than two years old and have fewer than 25 employees.
• Soft loan – These are similar to grants, but are actually loans with lower interest rates and more generous terms than can be found via other lending routes. Backed by the government, the Start Up Loans scheme offers personal loans of up to £25,000 with a 6% interest rate and access to free business support and mentoring.
3. How do I apply for a government business grant?
Each scheme is different, but check you meet the general terms and criteria before you get too far into the application process. Most grants are very specialist, such as creating a specific type of business or building a business that will help regenerate a local community. Here are our tips of successfully applying for a new business grant.
• Talk to the grant body – talk to the grant awards body to assess your chances of making a successful application.
• Read the grant objectives – take time to learn why this grant is being awarded and what it aims to achieve, such as hiring staff from a local community or developing environmentally friendly products. Write your application referring to the objectives as closely as possible to stand the best chance.
• Have a great business plan – as with other types of funding, the awards body for the grant will expect to see a professional business plan and, if you’ve started trading, examples of your business position and balance sheet.
• Focus on the grant use – grants are usually awarded for a specific project, such as buying IT equipment or funding broadband installation. Use the application to show how this will help grow your business and benefit others, rather than on the (in this case) IT equipment itself.
• Check your funding – most grants will look to match the amount you’re willing to invest, so if you’re seeking a grant of £10,000 then make sure you’ve a matching amount available.
