Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.
To get your bright idea for your small business off the ground, you’ll need funding. There are a few options for you as you look to start your new business and secure funding, and these include government grants for small businesses.
This guide will explain what a grant is and how it works, in addition to exploring the government grants available for small businesses and how to apply for them. The types of grants available for you will depend on the nature of your business and the stage you’re at. Some grants are aimed at startups, while others focus more on providing finance for growth. The eligibility requirements for each grant will be outlined to help small business owners understand what they may be able to apply for.
What is a business grant?
A business grant is different to a business loan. The key difference being that a grant does not have to be repaid. Eligible businesses can apply for grants and receive them as one-off payments or as regular injections of cash designed to boost growth without having to worry about repayment terms.
Eligibility for a grant depends on the business sector you work in and what plans you have for the money. There are many different types of grants for small businesses that can be applied for through the UK government or from local authorities and other institutions. Some grants are general, so you can spend the money on your business in any way you choose. Others are more specific and are designed for certain business expenses like recruiting new staff from the local area or paying for broadband or utility bills.
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How can I apply for a business grant?
Each grant scheme is different and will have its own eligibility requirements and application process. Reading the grant objectives and talking to people working at the grant body can help you to work out which grant is the best for you to apply for.
Most grant bodies will require evidence of the viability of your business. This can be in the form of a business plan or a comprehensive profit and loss (P&L) statement for more established companies.
Some grants focus on specific uses, such as hiring new staff or purchasing IT equipment. Fully understanding the grant objectives helps you as a small business owner put together a winning application.
What grants are available for a small business?
There are multiple grants available for small businesses form both the UK government and other institutions. These are often for a certain business stage, such as startup or growth, or for specific business functions, such as expanding employee count, providing broadband or expanding research and development. During the COVID-19 pandemic, additional grant schemes have been introduced to help small businesses through this unprecedented event as well.
Grants for SMEs focused on research and development
There are various specific grants available for SMEs in the UK to be used exclusively for research and development. These range from R&D tax relief, which allows businesses in the fields of science and technology to claim back a significant proportion of their annual development costs, to Innovate UK, which provides grants from £250,000 to £10 million to innovative start-ups. Innovate also offers UK Smart Grants from £25,000 to £250,000 to help fund up to 60% of project costs for disruptive, game-changing ideas as well as providing innovation loans for SMEs that need to borrow up to £1 million.
Gigabit Broadband Voucher Scheme
The Gigabit Broadband Voucher Scheme (GBVS) is a government grant aimed at rural businesses across the UK. Its goal is to provide funding specifically to ensure those businesses have access to high-speed capable broadband connections. Eligible businesses are those in areas where the current broadband speed is 100Mbps or less, with no current plans for regional network improvements and no other government-funded plans in place to improve networks in the area.
Gov Apprenticeship Scheme
Grow your business by employing an apprentice and teaching someone else your craft. The UK government has grants and funding in place to encourage businesses to consider apprentices when looking to expand.
The government offers four different types of capital schemes to help business owners raise money by offering tax reliefs to owners. These are the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS), Social Investment Tax Relief (SITR) and Venture Capital Trust (VCT). Read about each scheme on the government website to see if there’s a capital scheme that you could apply for.
Your small business may be eligible for rates relief from your local council, if your property’s rateable value is less than £15,000. Read about the relief available and how to apply.
Find a grant or business loan near you
There are many grants and other financial support options available to small businesses across the UK, most of which are specific to the region or industry you work in.
The UK government has also provided a free online portal detailing all available grants and other resources, including advice on investment, business loans and free services in local areas. This covers both local grants and national grants so browse the list and see if there are any that you can apply for – this could be the start of something exciting for your business.