The UK government does offer small business grants, but they’re by no means abundant.
While the GOV.UK finance finder lists all sorts of business support, much of this is either advisory or loan-based. This doesn’t mean you should write off looking for government grants for new business, however - there are some great opportunities out there.
Additionally, check out Grant Tree for an excellent source of public grants for small businesses and startups.
1. R&D funding
One of the biggest government grant schemes for business is SMART grants, specific to research and development (R&D) so they could work well for start-ups developing a product. What’s more, one of their main criteria is high-growth ambition - what startup doesn’t have that?!
SMART grants are available for:
Proof of market – up to £25,000
Proof of concept – up to £100,000
Development of prototype – up to £250,000
So if your startup is developing a product or tech service, you could apply for a Smart grant in one of their 6 annual application rounds. You’ll find the dates for each round on the SMART grants site. Once your application has been assessed, the Technology Strategy Board will collate the feedback to rank your submission and decide if they want to allocate funding. This whole process takes about a month after the closing date of each application round.
2. Local grants
You can find government grants for new business at a very local level too. For example, the Aylesbury Vale District Council runs the Aylesbury Vale Business Grant, which awards businesses with less than 30 employees up to £5,000 in funding. It's worth approaching your local authority or member of parliament who can help you find regional government grants - these are likely to be less competitive than national grants, and may even help you build contacts with other local businesses or mentors.
3. Apprenticeships scheme
If it’s staff that your startup needs then there’s a grant available if you’re willing to take on an apprentice. The National Apprenticeship Service can provide funding for training apprentices as well as a grant of up to £1,500 per apprentice age 16-24. Startups have long been hiring young members of staff fresh from school or university as they’re often keen to learn and affordable. If considering the apprenticeship grant, bear in mind this isn’t about 'cheap' labour, you’ll need to prove that the apprentice will be given full and fruitful training.
4. Or try alternative finance
As government grants for new businesses are relatively few and far between, you may want to head down the alternative funding route. If you’re investigating grants because you’d like to avoid a bank loan, then there are still other funding options open to you.
Crowdfunding and peer-to-peer lending platforms like Kickstarter and Funding Circle are a relatively fast and affordable way to access thousands of potential investors. With the peer-to-peer lending route you’d need to part with shares of your business in exchange for funding, while with the crowdfunding route you’d need to offer a reward for investment. This could be your product when it’s released, or an experience, like backstage passes.
Read our content on Small Business Grants for more in-depth advice and guidance.