Defining a Small Business Grant
It is no surprise that running a business (regardless of its size) is an expensive pursuit. Starting and growing a small business usually requires some form of financial support for multiple reasons, like supporting your cashflow, purchasing or renewing equipment, investing in a unit of your business, or funding growth, research, and development.
Business grants are schemes that aim to support these objectives, and you don’t have to pay them back. They are usually awarded by the government, local councils, private companies, or charitable organisations. If a grant is awarded by the government, it is usually to fulfil a certain policy, or because the business’s growth is in the public’s interest.
Between 2019 and 2020, the UK Government allocated £118 billion toward grants, across 1,915 schemes. Government grants are usually categorised as formula or general grants. Of course, they come with advantages and disadvantages.
It may be worth noting at the beginning of this guide that the disadvantages can be hefty mountains to climb. You’ll need to conduct extensive research (which can be time-consuming), and grants are highly competitive. Likewise, there is a possibility that you’ll need to reapply for them every year, and they may have conditions attached to them (contingency plans).
However, this should not deter you. Business grants are there for a reason, and they can be accessed with the right intentions, proposal, preparation, and research. Between 2019 and 2020, the UK Government awarded 190,600 grants. So, let’s make sure you’re part of those statistics!
Find out more: Thinking of buying a business? Read our guide on how to buy a business for helpful tips.
Difference Between a Grant and a Loan
Sometimes, business loans aren’t the most sustainable option because you need to pay these back with interest over a specified timeline. While business loans are suitable for a lot of business owners, it’s important that you understand how they’re structured, and what your obligations will be.
Business loans can be short or long-term and are usually differentiated between secured or unsecured loans. A secured loan requires security through collateral and a personal guarantee. This collateral could be stock, shares or property.
An unsecured loan usually requires a personal guarantee, but often has a significant interest rate. You’ll also need to have a great credit score.
Grants are different. You don’t need to pay these back. While this sounds exciting on the surface, they are challenging to access. There are thousands of grants available in the United Kingdom, but each grant has a complex application process, requirements, and criteria, and they are highly competitive. Nonetheless, they are a lifeline for many business owners.
Find out more: Looking for funding? Read our loans to buy a business guide for helpful tips and funding options.
The Pros and Cons of a Grant
Financing a business through grants will always have pros and cons, and it’s crucial that you familiarise yourself with them, and weigh them against one another.
Advantages
An obvious advantage of a grant is that you don’t need to pay it back, and there is an abundance of resources and guidance to support you in the decision-making process. While grants are competitive, they are still widely available, and you can apply for more than one.
Another advantage is that receiving a grant boosts your credibility. Because they are highly competitive, being awarded a grant not only confirms the value of your business, but it also increases your chances of becoming a successful applicant for other grants.
Disadvantages
Financial support can have disadvantages, so it is important that you evaluate these and ensure you effectively manage them.
The first disadvantage of a grant is that the proposal can be extremely time-consuming. Because each scheme has strict criteria and conditions, you’ll need to write an impressive proposal that will stand out. We’ll provide guidance on proposal writing toward the end of this guide.
Another disadvantage is that, although grants are free, they often have strings attached. Your objectives will need to align with certain policies, and therefore, you’ll need to abide by these policies. Your spending will be controlled, and you’ll likely be bound by rules and targets.
Lastly, grant money will eventually run out, so they are short-term solutions. Always remember that grants are there to support you for a short period of time. If you need long-term support, you’ll need to consider other options, like a loan.
Main Portal Links for Grants in all Regions:
While there is a plethora of information out there, it can become quite overwhelming to differentiate what would be the best fit for you. To make things easier for you, we’ve included the main government portals and authority sites:
Main government portals:
- England: you can filter your search by type of support, business stage, industry, region, and number of employees.
- Scotland
- Wales
- Northern Ireland: type ‘grants’ in the search bar on the top right.
Other authority sites:
Resources:
Small Business Grants You Can Explore
Below is an extensive list of funding options you can consider. It is important to note that some options aren’t technically grants, but can include investments, loans, and other forms of support. We’ll make sure we differentiate them.
Self-employed grants:
Use the government’s business support finder , and fill in the necessary details to see what is available.
Alternatively, you could apply for Universal Credit . Check if you’re eligible first. If you are and your application is successful, the amount you receive will be determined by certain factors like your earnings and personal circumstance.
Young entrepreneur business grants:
Spaces 4 Change – Social Enterprise Support Fund
This award supports social entrepreneurs who are attempting to start or grow their business. While no industry is specified in this award, the organisation needs to be committed to a social benefit. Applications open on the Monday 28th February 2022.
You can receive up to £5,000 to start a social business, or up to £15,000 to grow a social business.
Prince’s Trust – Enterprise Programme
For aspiring entrepreneurs who need training, mentoring or financial support. This programme can offer low-interest loans up to £25,000. While this is not a grant, small start-up grants are available in certain circumstances. You can apply for the loan here , or you can contact Prince’s Trust helpline for more support.
Other funding programmes include:
Investment schemes:
Seed Enterprise Investment Scheme:
Although this is not necessarily a grant, it is a very useful scheme to mention. SEIS benefits both entrepreneurs and investors. If entrepreneurs are seeking financial support, you can list your business on SEIS. You can receive capital in exchange for equity (maximum amount you can raise is £150,000). Make sure you do a thorough analysis of this option before pursuing it.
If you need assistance in raising capital, the EIS provides a similar structure to SEIS, although you can raise a larger amount of £5 million per annum.
The STIR is a benefit that public entities grant through the state. It aids in raising finances (through investors) to support a business that is community orientated or a charity. There are criteria that your business will need to meet, so make sure you read up on these. You will only be able to generate a maximum of £1.5 million throughout your enterprise’s lifetime. To apply, you’ll need to complete a compliance statement, and email it to [email protected].
Construction industry grants:
Business owners in the construction industry can apply for the CITB, which is a scheme that assists in maintaining standards on construction sites, and to encourage skill development to help the industry develop. This scheme offers apprenticeships that range between £2,500-£3,500, amongst other options. This scheme is available in England, Scotland, and Wales.
British Council grants
The British Council offers funding to support the development of education, and to assist academics and researchers. While most of their grants are closed for applicants, it may be worthwhile researching them for 2023.
Educational bodies and qualified individuals can apply for this grant. The purpose of this grant to is to “contribute to innovation in assessment practice” and to “contribute to innovation in language assessment development in general”. This grant can range anywhere between £10,000 to £17,500. Information, application forms and other important details for 2022 will be updated shortly, according to the site.
While this may not be a suitable form of funding for some business owners, it is worth mentioning for those who operate in the science, technology, engineering, or mathematics sectors.
The purpose of this scholarship is to increase opportunities for girls and women with career aspirations in the STEM sectors. The scholarship applies to South Asia, the Americas, East Asia, Egypt, Turkey, and Ukraine. Application deadlines are between 14 February and 10 April 2022
Ethnic minority business grants
Kwanda is a non-profit organisation that funds sustainable, transformative African ideas. Through pledges, the organisation raises money for entrepreneurs across the world. They invest in education, health, agriculture, equity, and other sectors. You can make an enquiry to see if you meet the criteria.
This grant – awarded through the Creative Debuts art platform- helps black artists through ‘no-strings attached financial support’. The grant is £500, and artists can spend it on whatever they require: new equipment, traveling costs, research, or exhibitions. Of course, you’ll need to meet specific criteria, and you can apply here.
Although this is a loan, it is worth mentioning as the interest rate is relatively low (6% per annum). You can borrow up to £25,000 and repay it over a term of 1 to 5 years. Lending statistics for this scheme demonstrate that 21% of loans were granted to ethnic minorities. To apply, you’ll need to undergo and eligibility check, fill in an application form and finalise your business documents.
Although this platform does not directly offer grants, it is a valuable and accessible resource for ethnic minority entrepreneurs – particularly black women. It highlights products, services and grants that are currently being offered across the UK.
Other funding programmes include:
Freelands Foundation Art Grants
FSB (hub for advice, support, and expertise)
Community grants (upliftment)
This grant assists local charities, community organisations, social housing providers and more. It can award a grant of up to £1,500. Ensure you read up on the criteria, guidance, and FAQs before proceeding. If you meet the eligibility criteria , you will receive and application form.
This organisation supports voluntary and community groups. It is important to note that between the period of 2018-2019, only 12% of 2,629 applications received this grant. According to this report , the average agreed grant can be £57,553 – but it is highly competitive. The Tudor Trust will be closing to new applicants between 1st April 2022 to 31st March 2023. Find out how to apply here.
This scheme is dedicated to the UK space community, supporting efforts that promote the value of space in education and outreach. Approximately £65,000 will be available under the scheme, and successful applicants can be awarded a maximum of £10,000. This grant is extremely competitive.
The deadline for the proposal is 18 February 2022 at 5pm. You can download the guidance document and application form on the UK Government website linked above.
There are other community development grants listed here.
Local enterprise partnerships (LEPs)
LEPs are integral in supporting and building local economic growth. The LEP Network is the lead negotiator for LEPs across the country. Take a look at their local projects, which include areas like Cheshire and Warrington,Buckinghamshire, Cornwall and Isles of Scilly
Innovation grants
UK Research and Innovation is granting up to £25 million for SMEs that are conceptualising disruptive, commercially appropriate business ideas. Applications close on 13 April 2022 at 11 am, and you can apply through the UK Government website and you can take an eligibility quiz through Grantify.
UK-South Korea Collaborative R&D
SMEs can apply for a share of up to £2million. Its purpose is to develop “innovative proposals with South Korea”, focusing on the industrial sector. This proposal will need a partner from the UK and South Korea. Applications close on 6 July 2022 at 11am.
Other funding programmes include:
UK-Singapore Collaborative R&D
You can also visit the UK Government Innovation Funding Service for more
Apprenticeship grant
Incentive payments for hiring a new apprentice
£3,000 can be granted to an employer hiring a new apprentice. The employment start date needs to be from 1 October 2021 to 31 January 2022. Applications close on 15 May 2022. You’ll need to create an account, and you can apply here.
Retail improvement grant
Retail, Hospitality and Leisure Relief Scheme (England only)
This scheme, worth over £1.7 billion, will run through the 2022/2023 period only. Its aim is to support businesses on high streets and town centres and assist in adapting to shifting consumer expectations. The scheme can provide up to 50% relief (cash cap of £110,000 per business). Local authorities will be responsible for delivering the scheme. You can find more information by sending an email to [email protected].
Shopfront Improvement Scheme (Oban, Lorn, and the Isles only)
If you are a business owner (from the above areas) that needs to repair or maintain your shopfront, you can apply for a grant. The grant ‘pot’ has £13,593.50 available. You can apply for a maximum of £5,000. You can find the application process and documents at the bottom of the page.
Other funding programmes include:
Vacant to Vibrant (Belfast)
Equipment grants
You can apply for a grant for equipment to increase productivity and promote environmental improvement. This fund is specific to England, and it can pay for up to 40% of the cost of a project. The maximum grant you can claim is £500,000. Eligibility checks close on 16 March 2022, and the full application process closes on 14 September 2022. All the application guidance can be found at the bottom of the website.
Other funding programmes include:
Arts University Bournemouth Vouchers
Disability grants
If you have a physical or mental health condition, you can apply for an Access to Work grant. The grant can assist you in practical support, guidance on managing your mental health, and funding to assist in communication at job interviews. You should check if your eligible first, and you can find apply here.
This trust is a charity that supports multiple sectors. In its health charity section, you can apply for a grant between £5,000 and £20,000. Applications will open on 1 April 2022. It’s important that you conduct research into who the charity does and doesn’t fund. Information on how to apply can be found here.
You can also research more options on the Disability Grants website.
COVID-19 grants
Social Enterprise Support Fund
You can apply for a grant from the SESF if you need to get your business back on track. The funding can also support organisations that help others recover from the pandemic. The grants can range between £10,000 and £100,000. You can find information on the application process here.
To support the recovery of Scotland’s events and tourism sector, the National Events Programme aims to support events that promote tourism outside of Glasgow and Edinburgh. You can be awarded between £2,000 and £4,000 for smaller events, and between £5,000 and £25,000 for larger events. Deadlines for applications are 6 April 2022. You can find all the necessary application information here.
Other funding programmes include:
Omnicron Hospitality and Leisure Grant
You can also search the UK Government website for coronavirus financial support.
Business expansion grants
Help to Grow Management Course
This course aims to support businesses by teaching practical management skills. It will cover areas such as strategy and innovation, brand development, adopting a digital process, financial management and more. 90% of the course is funded by the Government. Each participant will need to pay £750. You can find a course in your vicinity here.
If you are based in Leicester or Leicestershire, and you are an SME, you can apply for this fund (other eligibility requirements should be researched). These scheme offers several grants. If you need to fund a project, you can receive between £2,000 to £25,000, but you’ll need to cover 65% of the project costs yourself. Alternatively, you can apply for a revenue grant, with a cap of £7,500. You can find application information on the website.
Considerations When Writing Your Grant Proposal
As you are aware by now, applying for a grant can be a challenging process, and most of them are extremely competitive, so your proposal needs to stand out. Before you begin writing your proposal, you need to remember the following:
- Writing and applying for a grant can take some time.
- Grants have requirements, so you most likely need to spend your funding on something very specific.
- You’ll need to provide evidence of your spending, and this can be a resource and time-consuming task.
Review the grant application instructions with intensity
Every grant has specific eligibility criteria, deadlines, and wider goals. Ensure that you read the fine print multiple times and consider how you’ll align with the organisation’s vision and goals.
The application will require multiple documents, reports, comparable data, and statements. Ensure that you have these ready to go so you don’t get disqualified.
The executive summary
Your executive summary should highlight why your business needs the grant, and how you will execute the project. It will also include factors like your market segment, project goals and a brief explanation of how you’ll spend the grant.
This summary needs to be concise and clear (about one and a half pages). This will be an opportunity to introduce your organisation, so make sure you hold the grantee’s attention throughout.
The needs statement
This will detail your problem, and why the grant will be your solution. Has the problem been around for a while? Have you made previous attempts to rectify it? Do you have data to demonstrate this? You’ll need to show that you’ve done extensive research on this problem, and that you understand its scope and why you should be the applicant to solve it.
Remember, the grantee may not have extensive knowledge or expertise on your business sector, so don’t assume they do.
Project description
Your project description needs to demonstrate your goals, and how you’ll achieve them. You’ll need to include the following:
- Your objectives and how they will be measured (make sure they’re SMART).
- How your goals will benefit the grantee, community, or government.
- A timeline to achieve your objectives.
- An estimation of your budget.
- Ways you’ve faced this problem before, and how you’ll do things differently (methods and strategies).
- Employees or people that will be involved in the project, and what their roles will be.
- Your KPIs.
- How you will track and measure the project’s success.
Budget
You’ll need to be specific here. Be realistic and provide financial documents. It may be useful to have an accountant audit your financials first, to ensure that your numbers are accurate.
This section shouldn’t just detail your budget. It should also emphasize long-term ongoing costs like inflation, training, future growth prospects, ongoing maintenance, and other forms of support.
If the grant you are applying for is long-term, ensure that you provide ongoing costs for about four to five years.
Cover letter
Your cover letter will be the document that gives the grantee a first impression. While the cover letter does need to be formal, you can add a more ‘human’ touch to it (but don’t get too emotional). You need to compel the grantee and demonstrate why you are the top applicant. Avoid comparing yourself to competitors and demonstrate how you’ll give back to your local community and the wider environment.
Writing the cover letter first or last is up to you, but it may be beneficial to write it last, as you’ll have a better understanding of your objectives, and you’ll be able to summarise your needs more clearly.
Proofread your proposal
Multiple times.
It’s important that you triple check spelling, the layout, and financial details. We recommend hiring someone to proofread your proposal for you.
Find out more: Want to know how much your business is worth? Get a free estimate valuation.
How BusinessesForSale.com Can Help You
While applying for grants can be a rigorous and time-consuming process, they are a light at the end of a dark tunnel for many business owners. The meticulous and competitive nature of grants should not deter you.
We recommend conducting a valuation of your business before applying for a grant. This will give you some important insights into your business that you can use in the business proposal. You can get an accurate valuation for free through ValueRight.
Even though you may not be interested in exiting your business or purchasing one, our selling and buying guides can be a useful form of research that will better equip you in case the time comes.
We wish you every success in your application! If you need more support, feel free to contact our dedicated team.
