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5 Grants to Apply for When Starting a Business
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So you’re thinking of starting a business! Grants can be a great way to fund those early days, but finding and applying for the right business grant is a challenge if you aren’t sure what to look for. We’ve put together an easy-to-read guide on grants to start a business, so you can get the funding you need without the hassle.
Our top five business grants for new businesses
There are loads of grants out there, each with different goals. These can range from helping underrepresented people become business owners to supporting new scientific or technological developments. Let’s take a look, shall we?
Small business and start-up grants
Start-up or small business grants aim to help out fledgling businesses to stimulate the economy and help keep independent businesses thriving. There are different grants for different types of business so make sure you do some research to see which is right for your new business.
This grant offers funding (up to £8,000) and support to help new businesses committed to creating social impact in a financially sustainable way.
A project delivered by the School for Social Entrepreneurs with support from Power to Change that offers training, support and grants for community businesses.
Innovate UK offers a range of grants and resources for UK businesses. This programme offers funded, expert support to help grow new or scaling businesses.
This programme offers multiple resources for new businesses, including Start Up grants of up to £5,000 and Test My Business Idea grants of up to £500 for concept-stage start-ups.
Resource grants
Some grants offer accessible resources as well as or instead of a cash sum. Resource grants might include discounts on equipment and training.
This programme offers a free four-day business course teaching budgeting, cashflow, book-keeping and tax, after which you can apply for a two-year business mentorship.
Hatch Enterprise offers free or discounted business programmes for underrepresented entrepreneurs starting, growing or scaling their business.
This programme offers a match-funded grant of up to £20,000 for equipment, advice and training to help businesses in the East of England improve their operations.
Circumstance-specific grants
Many grants have very specific goals and only award funding to businesses that meet particular criteria. For example, some grants are only awarded to women and young entrepreneurs, or businesses that are carbon neutral.
This Innovate UK award aims to encourage entrepreneurship and innovation by offering funding to women who are at a critical stage with their business.
Graduates of Hatch Enterprise’s Launchpad, Incubator or Accelerator business programmes can apply for grants up to £1k, £5k or £15k respectively.
An award offering businesses with outstanding sustainability solutions up to £20,000 and the chance to attend the United Nations Framework Convention on Climate Change.
Regional grants
There may be regional grants available where your business is based. Have a look at the grants available in different parts of the UK. Some regions have lots of funding available to stimulate their economy and boost local business.
This fund offers community businesses across the North East of England access to support and flexible repayable finance.
A grant of up to £180,000 to help small businesses operating in Birmingham’s Clean Air Zone upgrade their vehicles to meet Birmingham's Clean Air Zone emission standards.
This project offers up to £100,000 for energy efficiency projects. The grant is match-funded and requires the business to cover 25-50% of the project costs.
Tax relief grants
There are a range of government-run schemes that aim to help out businesses, some of which can provide tax relief and help a business reduce the amount of tax it needs to pay.
Research and Development (R&D) tax relief offers cash payments and Corporation Tax reduction to businesses making useful advances in science, mathematics or technology.
This scheme helps small or early-stage businesses secure funding by offering investors income tax reductions of up to 50% on their investment in a new business.
Application tips
After you’ve decided on a grant, the next step is applying! Grants are often pretty competitive, so getting funding will take more than just meeting the grant’s eligibility criteria. Here are some tips on how to put together an excellent grant application and win that funding.
Research the awarding body
Research, research, research! Every grant works differently, and understanding how they work will give you the best chance to find the right grant for you, impress the funding committee, and avoid unpleasant surprises. Here are some questions to ask before applying for grants:
What region does the grant cover? Is your business in that region?
Is the grant offered by the government, a nonprofit organisation or a company?
What kind of business is the grant looking for?
What does your business need to do to be eligible for the grant?
How much funding is available?
How will the funding be allocated?
Is the grant match-funded?
Be clear in your goals
Funding committees have to go through hundreds of grant applications, so make sure yours is well-written and organised. You want the person reading your application to be able to see at a glance everything they need to know.
Top tips
Avoid using long words and sentences unnecessarily to try and look smart. The judges won’t be fooled! Instead, impress them with clear, concise writing.
Check and recheck the grant’s goals and specifications! The more relevant your application is to the grant you’re applying for, the more likely you’ll get it.
Start early — applications usually take longer than you think, so start early to make sure you have time to put together a great application and apply as soon as the application opens.
Here’s an idea of how your application should look:
Introduce your business, your project, how much funding you need, and how you’ll use it.
Set out your grant proposal, explaining clearly and thoroughly how your business or project meets the grant criteria.
Summarise your grant proposal.
Give a more in-depth look into your business, including how you started your business, your mission and goals, and any notable, relevant achievements by you or your business.
Explain in detail the goals of your project and why it's important — how will your project benefit the world outside of your business, such as the local community, the economy or the environment?
Write a business plan and include your budget and any other useful data. Your business plan and budget should be thorough and detailed. Think about where every pound is going!
Use all of this information to prove that this project is valuable, and that you need this grant to be successful. Show that your project will get the most out of this grant!
Why apply for a grant?
From rent and advertising to staff and furniture, starting a business can be a strain on the purse. Applying for a grant can help with these initial costs.
There are a few ways to manage costs when starting a new business.
If you have savings or a large income, you might be able to pay for a new business out of pocket. Look at your finances and draw up a solid business plan to get an idea of how much you have, and how much you’ll need.
You could borrow from friends and family. Just make sure that they have enough to lend, and you will be able to repay it — lending money can put strain on close relationships, so approach with consideration and communication!
You could also take out a business loan.
Grants vs Loans
So what’s the difference between a grant and a loan, and which is right for you?
Loan
A loan is money you borrow and repay later with interest. You can apply for loans from banks and online lenders. We can help you learn if taking out a loan is right for you.
Grant
You don’t have to pay grants back at all — however, you might have to spend it according to grant specifications. Grants might come as a cash prize, or a reimbursement or price match to your own spending. Be sure to read up on how a grant works before you apply.
Keep applying
If you can’t find the right grant for your business right now, or your application wasn’t chosen, don’t give up! There are always new grants being created and applications opening up, so make sure to keep checking so you can get your applications in and increase the chance of getting funding for your business.
Have a look at the eligibility needs for different grants. Did you just miss out on funding because of something that you could change relatively easily? Or is it worth rethinking certain areas of your business?
You can search the wide selection of grants available across the UK using these support and funding finders:
Get our expert guidance on starting a small business
We understand how difficult it can be to get a new business off the ground. You have an idea you want to see in the world, and it can be frustrating to jump through all the hoops to get there. From planning permission, rent agreements and licensing to technical, financial and staffing issues — trust us, we get it.
At Start Up A-Z we offer clear, personalised guidance from friendly experts to help you navigate the early stages of starting a business. Get started today with our company formations packages — let’s make your vision a reality!