The Ultimate Guide To Small Business Grants And How To Access Them

Last updated: 7 October 2020

Estimated reading time: 15 minutes

According to the Centre for Entrepreneurs, 663,272 new businesses were registered in the UK in 2018 – a 5.7% increase on the 2017 tally. But a key consideration for all of these small business owners is how to pay for it.

If you want to start your own small business, carefully consider where you’ll get the money, not only to launch it, but also to keep it afloat until it pays its start-up costs and can cover monthly outgoings, otherwise you’ll need to seek venture capital, a small business grant or small business loan. Many new businesses would love to apply, but just don’t know where to start.

Jump to:

  1. Start-up grants and small business loans
  2. What are small business grants?
  3. How to find start-up business grants 
  4. How can I get a UK small business grant? 
  5. How to apply for small business grant
  6. Small business grants and how to access them
  7. Securing your small business’ future
  8. UK small business grants: Other useful resources

Start-up grants and small business loans

There is, of course, one major difference between a small business grant and a small business loan. Unlike loans, start-up grants are non-repayable, providing they’re used for the purpose for which they were awarded.

Start-up grants are normally made available by government and public-sector organisations, but some private-sector organisations also provide them (for example Unilever and Shell).

As well as start-up grants, there are small business grants, which are normally awarded for specific purposes (like to start selling overseas, staff training, job creation or to fund new product development).

The grantee might want to encourage businesses in an underdeveloped part of the community, or among certain demographic groups. They might want to encourage a particular industry sector, such as health innovation or green technologies. If you don’t satisfy the grant criteria, your application won’t be approved.

What are small business grants?

Small business grants are amounts of money awarded to businesses. Unlike a loan, there are no repayments or interest added; unlike an equity investment, you don’t have to give away part of your business in return for the cash.

Instead, businesses must agree to certain objectives or goals stated by the organisation giving the grant. Usually the grantee is a government group, but it could also be a charity or even a large corporation.

Grants are not free money. First off, the application process is often complicated and time-consuming, making the admin hard work. You might put time and effort to better use generating sales or delivering contracts.

Secondly, you must meet the expectations of the organisation granting you money. You must spend it the way you promised to and not, for example, funnel it into inflated staff salaries or paying out big bonuses.

Almost every grant is approved on the basis of a water-tight business plan, thorough ongoing reporting (including financial statements), and a well-executed plan to serve society in a positive way.

How to find start-up business grants 

If you’re looking for a start-up business grant or loan for your small business once you’re better established, government website gov.uk is the best place to start your search. 

It provides a handy, searchable list of sources of support and funding for start-ups and small businesses. You can filter the 172-scheme list by specifying what type of business support you’re looking for, what stage your business is at, your sector, number of employees and your UK region.

What about business support organisations? Well, your local enterprise agency or Growth Hub (England only) might also be able to tell you about start-up grants available in your area, while your trade association may know of start-up grants available in your sector.

There are a few UK-wide sources that offer small business support and funding worthy of mention. Charles, Prince of Wales, started his charity, The Prince’s Trust, in 1976. Its Enterprise Programme has helped almost 90,000 young entrepreneurs under 30 to start their own small business. Although The Prince’s Trust works with the Start Up Loans Company to enable young people to access start-up funding, it makes “small start-up business grants available in special circumstances”.

UnLtd is the “leading provider of support to social entrepreneurs in the UK”. Social enterprises are businesses created to address or meet a social or community issue or need. Since 2002, working in partnership, UnLtd has supported more than 16,500 social entrepreneurs and last year it helped more than 250 people to start a social enterprise.

According to UnLtd: “We combine cash and coaching to help nurture ideas and grow impact”. Its social enterprise awards range from £500 to £15,000 and they’re available to those wanting to test their social enterprise business idea, launch their social enterprise business or grow it.

How can I get a UK small business grant? 

If you’re still interested in securing a grant, you probably have a few questions about the process. Can I get a grant to start a business? How can I qualify for a grant? Can I get a small business grant to grow my business? Are there free government grants?

To answer these questions and more, we’ll take a look at some popular types of small business grants in the UK. We’ll also list grant-approving organisations that are currently accepting applications.

How to apply for small business grant

As explained on the Funding Central website: “The [grant] application process can take time; each funder has [its] own criteria, priorities and processes, which means every application has to be tailored. It then takes time to get a decision and receive the grant.”

And it doesn’t end there. “You may have to provide a detailed budget to the funder, as well as evidence of expenditure, a grant programme evaluation and regular progress updates. You may also have to sign a grant agreement or contract.” You’ll probably need a sound business plan, too.

The Start Up Donut website provides guidance on grant funding – how to find grants and apply. The Start Up Loans Company website article How to get a small business government grant also offers advice. In truth, start-up businesses grants are few and far between, and competition is fierce. However, many business owners successfully apply for start-up business grants, so, why not you? Best of luck.

Small business grants and how to access them

The UK government is occupied with running the country and it rarely conducts its own innovation projects or invests directly in research and development. So, instead, it provides incentives for private organisations to develop new products and services.

It has a choice of ways to do this, including tax incentives, funding trade missions or by financially supporting businesses that share its objectives (via grants). In general terms, the government wants to see activity in three areas:

  • Research and development
  • Exporting goods into foreign markets
  • Not-for-profit, charity or local government projects that benefit the public

Here’s a list of popular business grants which fall into these three areas of interest:

The Prince’s Trust Enterprise Programme

A popular project to help young people start businesses, with coaching and workshops. There are also grants called ‘Development Awards’ for start-up businesses to invest in training.

How much does it award?

Development Awards go up to £500 each, but backed up with expert mentoring and advice, it’s an extremely useful business support package for first-time entrepreneurs.

Who can apply?

Anyone living in the UK aged between 18 and 30 who want to turn an idea into a business can apply for a start-up grant.

How can I apply?

Applications are welcomed via the Prince’s Trust Website.

British Council Grants

The British Council offers a grant scheme for research, travel, and workshops. The grant programme is updated regularly to advertise new opportunities.

How much does it award?

Grants are generally small and vary depending on the goals of each project.

Who can apply?

Individual grants have their own criteria, so look for the small print.

How can I apply?

Check out the British Council’s website.

Nesta

Nesta describes itself as an ‘Innovation Foundation’ which helps people and businesses turn ideas into real inventions. It does this through advice and financial support.

How much does it award?

Nesta offers an evolving range of grants, preferential loans, and prizes. Currently it is offering several funds to help businesses. These aim to create new learning projects that will solve social problems in the UK.

How can I apply?

Visit the Nesta website for more details.

Grow It award

The Grow It award is aimed squarely at entrepreneurs with a social conscious. The award is designed to help small not-for-profits and social businesses achieve the next stage of growth.

How much does it award?

You can get up to £15,000 to invest in growth. Also on offer is 12 months’ mentoring, including workshops and masterclasses, as well as connections to fellow entrepreneurs and corporate partners.

Who can apply?

Businesses with social objectives. Your business must be at least one year old, but no more than five years old. It should be “dynamic and ready to grow” and it should look to benefit the UK.

How can I apply?

Check out the UnLtd website for more details.

Innovate UK

Innovate UK is the country’s official innovation service, encouraging private sector groups to invest in cutting-edge technology and methodology.

How much does it award?

Innovate UK runs a series of Innovation Competitions to promote parts of the economy from food production to aerospace to offshore wind power generation.

At time of writing, it has business growth competitions with awards ranging from hundreds of thousands to several millions of pounds.

Who can apply?

Businesses must meet eligibility criteria in each competition. These range from the size of your business to its willingness to partner with other groups.

How can I apply?

You can browse a list of competitions on the Innovate UK section of the gov.uk website.

Wellcome Trust

The Wellcome Trust is a charitable foundation set up to improve public health through clever ideas.

How much does it award?

It has a range of grants on offer, mostly for academic research but also for not-for-profits and commercial businesses.

Its Innovator Awards give up to £500,000 over 24 months for researching and developing healthcare innovations.

Who can apply?

UK businesses with plans to create technologies in therapeutics, vaccines, devices, diagnostics, digital tech, and regenerative medicines can all apply.

How can I apply?

Take a look at the Wellcome Trust website for more details.

Regional grant funds

From Eastbourne to Inverness (and beyond) around the UK a network of local government organisations have created funds to provide grants to nearby businesses.

The funds are run at different levels, including county, borough, city, and town. They aim to stimulate important parts of the local economy. A few examples include:

Independent Retail Grant: Part of Test Valley Council’s effort to support Andover and Romsey’s town centres.

Elbridge Start-up Fund: Offering £1,000 towards the start-up costs of new business equipment purchases, marketing and delivering your first project.

Cumbria Infrastructure Fund: Part of the national Growing Places initiative, the Cumbria Infrastructure Fund backs projects which unlock development, creating jobs and homes.

Caerphilly Commercial Improvements Grant: The borough council gives grants for projects to improve deteriorating buildings, especially if the solution involves upgrades that are environmentally friendly. Businesses can receive up to 50% of the project spend to a value no more than £15,000.

Securing your small business’ future

The above grants are just a small selection of the funding that’s on offer throughout the UK. Some grants are only available temporarily, so it’s worth checking regularly to see whether one is available to you.

With some research, a little preparation and some good intentions, business owners can raise growth capital without relying on bank finance, equity investment or even friends and family. If you think you could be eligible for a grant, finding out is usually worth the effort.  

UK small business grants: Other useful resources

  • Business Finance Support Finder: Gov.uk’s official list of organisations that provide finance to growing businesses. These include loan organisations as well as grants.
  • Enterprise Ireland: Enterprise Ireland offers tips on how to secure grants as well as information on funding for retail, technology, and regional development.
  • The Grants Hub: This website offers tools to help you apply for a small business grant and lets you calculate the most suitable source of funding for your business.

What next?

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