How to Get Government Funding for Your Business in the UK
Getting your enterprise off the ground can be tough. Once you’ve chosen your business structure, business name, and set up a business bank account, one of the toughest things to do is secure funding. There are so many funding and money issues involved in starting a new business that it can sometimes seem overwhelming.
Or maybe you’ve already started your business, but you need some extra help investing in vital areas so your enterprise can grow.
No matter where you’re coming from in your business journey, there’s plenty of money out there to be found - you just have to know where to look.
Read on to find out how to get government funding for your business in the UK.
Am I eligible?
Some people might wonder if they’re eligible for government-backed grants. Most small and medium-sized businesses can qualify for government grants, depending on the grant they apply for.
Grants vs loans
There are plenty of ways to fund your business. Some businesses prefer to go with equity loans, selling shares in their company for funding. Others, however, go for loans.
A loan is a determined sum of money that is lent to you from a lender. A lender could be a merchant bank, the government, family members or some other entity.
Loans are meant to be paid back, usually at interest. Loans are often provided based on things like sound business plans and market research - giving out a loan is risky, and most lenders will want to make sure they have a decent chance of making profits from their investment.
A grant, on the other hand, is a sum of money that you receive that doesn’t need to be paid back, but that is usually only given out according to certain rules. Grants are usually provided to small businesses for things like reducing costs, buying equipment, and reaching new markets.
In general, grants aren’t just free money. Most grant programs will require you to have existing funding, which the program will attempt to match. So, if you can show that you have £10,000 to fund your new broadband connection, winning a grant will mean that the government will try to match that £10,000.
Where can I find grants?
The UK government will provide grants to UK businesses. There are also grant programs for Welsh, Northern Irish and Scottish businesses, which are provided and advertised by the devolved administrations. All these websites provide hundreds of grants between them for almost every type of business in any location.
There are also special funding initiatives for particular sectors, such as hospitality, retail and leisure.
What do I need to apply?
No matter what government funding you’re applying for, you’ll need to have a few things in place before you put your application together.
- An up-to-date business plan that details the next year and scopes out the next five
- A work plan, including a detailed breakdown of how you plan to spend your grant money
- A history of your business, if applicable, or a detailed personal history of your skills and experience. This will help convince any awarding body that you will act responsibly with your money
- An explanation of how the awarding body will meet their goals by giving you money
- Funds matching the proposed grant amount. Grants aren’t free money - they’re meant to match existing funding levels so that businesses can get the most out of their investments
Tips for applying for government funding
While funding is available for many different schemes, the competition for the money can be fierce. After all, the government only has a limited amount of cash to give out.
In order to have a chance of securing a grant, you need to stand out from the pack. Here are some things you can do to get your application noticed.
Apply early
If there’s a good time to apply for a grant, it’s right when it opens. The awarding body will still have the full pot available and fewer people will know about it, so you won’t have much competition.
Make sure you’re continually checking government websites for updates on new grants.
Make a contact
It helps to introduce yourself to, and get to know, someone at your awarding body. If anything happens with your application, you’ll know someone there who can help you with your issues and get personalised advice.
Use a grant consultant
When you hire a grant consultant, you’re outsourcing your grant applications to someone else.
A good grant consultant will know the grant landscape like the back of their hand and will help you identify the best grants for your organisation. They’ll also know how to effectively communicate with the awarding body and track your application’s progress.
A grant consultant can be really great value if you’re intending to apply for many grants at once. However, their services can be expensive, so you want to make sure they’re worth the risk, since no grant consultant will be able to guarantee a successful application.
Apply early in your business journey
Awarding bodies want to see that their applicants actually need the money. If you make too much progress in your business venture, they may come to the conclusion that their funds would be better suited elsewhere.
Read and abide by the grant’s rules and objectives
When putting out a grant, an awarding body will provide a series of rules that you’ll have to follow when applying.
They will also have objectives they will need to meet when providing their grants. If a grant is being given out to help provide funding for new innovations in industry, you will need to outline how your business will be innovating in your field. Also, be sure to outline the ways in which your grant will help bring benefits to your field of endeavour - saying that you need it to build a profitable business won’t cut it.
How long does it take to get a business grant?
Applying for grants and receiving a response can take a really long time. The whole application process can sometimes take months, and you may not hear about the results of the body’s decision for much longer.
However, it also depends on the type of grant you’re applying for. In general, the more local your awarding body, the less time you usually have to wait. Applications to a local authority, for instance, could probably be resolved in a matter of weeks, whereas applications to a national grant scheme could take much longer, usually many months.
Use your grant to fund your new equipment
Grants can be used for all kinds of things, from hiring staff to renting office space. But one of the most useful ways of using your grant is to buy new equipment.
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