Small Business Grants

Small Business Grants

Your essential guide to finding small business grants in the UK

Are you just starting up or looking to expand? Either way, it’s likely that you’ll need funding for your business at some stage – whether it’s for product development, hiring employees, marketing, or upgrading IT.

Business funding can be the difference between failing and becoming a force in your market. Yet when seeking finance options, it’s easy to feel bewildered, since the funding landscape is in constant flux, often influenced by economic and political shifts. To make your life easier, we've put together this handy guide on small business grants, as well as the other funding solutions available to SMEs in the UK. 

If you're looking for grants in the USA, Chamber of Commerce's guide to government grants for small businesses is a good place to start. 

Small business grants – the basics

Small business grants are often the best way forward when business owners want to avoid equity funding or getting into debt. They also provide an alternative to borrowing from loved ones – a potential minefield for personal relationships.

Grants are awarded by the EU, government, local authorities, charities, LEPs and other funders. They can certainly help businesses fulfil their potential, but there's plenty to consider before applying for a grant.

Firstly, many grants support specific economic needs including technological innovation, employment and climate change. Others are targeted at certain industries such as agriculture, design or manufacturing, and most funders give money to support individual projects. Cash can be handed out in one go, or released in tranches, at project milestones.

Most grants only cover some of the project costs. Awarding bodies usually match-fund, so SMEs need to part-finance projects to be eligible. New Anglia LEP, for example, gives between £5,000 and £500,000 to businesses in Norfolk and Suffolk. SMEs can apply for a 20% contribution towards finding more funding from banks and investors. In other words, the grant creates important leverage.

Bear in mind, however, that SMEs need to meet strict criteria to secure a grant, and will also have to fend off competition from other businesses that will be competing for the same pot of money. Committing your time to research and planning is therefore essential.

Where to find small business grants

The journey to securing a business grant can be perplexing. To help, we’ve gathered together helpful information about the type of grants currently available.

EU and government grants

Business grants from the EU and central government are up for grabs in areas ranging from technology to conservation, and include:

Regional grants

If you can’t secure money direct from the government, you could still access funding at a regional or local level. This may be a grant offered by a town council that wants to encourage businesses to establish offices or factories in their area, or regional grants established to encourage the development of specific industries. All of the below are good starting points:

Grants for young entrepreneurs

Young people are supported in many ways these days, and the following schemes offer help to the UK's most promising business stars:

Scottish business grants

If your company is based in Scotland, Scottish Enterprise can cover up to 50% of new project costs through its research and development grant. It welcomes applications from the majority of sectors and can also support defence projects, subject to certain restrictions.

When assessing a company's application, Scottish Enterprise will consider its impact on R&D jobs in the region; how it supports other local companies; the global market opportunity for the product or service; and the wider impact on society, including environmental effects.

Search tools for business grants

Online tools can help you sieve through the thousands of grants out there. The below websites let you filter searches by business phase, size, industry and location.

Being part of accelerator programmes and business incubators can also open doors to small business grants in your field. In fact, business networks are generally hotbeds for news of exciting opportunities, so stay plugged in.

The secrets of winning business grants

With plenty of business grants out there – around 6,000 in fact - you could spend hours (and hours) finding the one that best matches your needs. Even if a grant seems unsuitable at first glance, persevere and read the details. It may turn out that you need to approach your application differently in order to meet the criteria. Never be dishonest or misrepresent your business in any way.

Let's say you’ve seen a grant that supports new jobs, but you need cash to develop software. Your application needs to focus on how the project will create new jobs for local people, and you should be prepared to provide evidence of this at a later stage.

Anyone who's successfully secured a small business grant will tell you that each scheme is different. Where some are straightforward, others are long-winded and complicated. Either way, knowing how to secure grants is gold dust to a small business, giving you the edge over competitors. With that in mind. here's some more advice on how to land a small business grant:

Affordable alternatives

Technology is giving rise to alternative forms of business finance, creating greater choice for business owners. If you’ve not had much luck with traditional bank loans, lenders like Fleximize could be the answer. Not only can we fund a company in as little as 24 hours, but you'll also have access to a number of benefits such as repayment holidays, top-ups and penalty-free early repayments.