It’s 2020 and the perfect time to start your small business with the help of UK government small business funding programmes.
Each year, the British government hands out billions of pounds to small business owners all across the UK.
These funds provided by the government come from various levels of the government; local, regional and national. They are provided to help small business owners and entrepreneurs to startup, to expand, to build a stronger economy.
There is one problem though!
Since the funds are provided by numerous governmetn agencies, finding this information sometimes is a bit difficult, leading people to believe that “no funding exists”.
So today, we are going to show you the different types of government funding programmes that small businesses across the UK can find, and apply for in 2020!
2020 UK Government Small Business Funding
Since the funding available comes from different levels of the governmetn, the funds appear to be a bit scattered and difficult to find.
Generally speaking, the funds available often come in the form of a government grant, government loan or a tax break/tax credit. However, there is much more to it than just those 3 different funding programme types.
Each of those 3, are much more involved than anyone thinks and thus, the general lack of knowledge of the information regarding governmetn funding for small businesses.
So let’s clear it all up, shall we?
Types of Government Small Business Funding Programmes
Most individuals, if asked about what types of governmetn small business funding programmes exist, they would immediately think, “grants”!
Even though grants are the most difficult to obtain, they are often the first ones considered and wanted by majority of those who apply for government funding.
So let’s review “grants” and what they really are first.
When you think of grants, you probably think free money that does not need to be repaid. And you are right; however government grants are much more involved than that.
There are different types of governmetn grant programmes which many people don’t consider.
The different types of government grants include:
- Non repayable government grants
- Partial contributions
- One Time and Renewable
So what is the best type of grant? Why so many different kinds? What are they exactly?
Good thing you ask questions, because these grant types are all very different.
A non repayable government grant is a funding programme that is often provided when you as the business owner meet specific criteria set forth by the govenrment funding agency. These funds provided to you are non repayable which means – as long as you follow your initial action in which you obtained the funds for, you do not need to pay back the funds.
Partial contributions are also part of “grants”, because it’s still considered money which you do not need to pay back, similar to the non repayable government grant, however with one big difference. A partial contribution often requires the business onwer to provide the other “part”. If you need 10,000 pounds, the government may fund you 7,000 (considered partial), but you, as the business owner are responsible for the rest. Not meeting this condition, you will not be eligible. Each partial contribution grant programme has different conditions, and this is something to note before applying.
Last type of grant is a one time and renewable grant. These are excellent ways to obtain the funds you need for a specific purpose (non repayable), but also the doors remain open in which you can obtain the same funds or even more in the future if needed.
Grants are excellent options for business owners in the UK to take advantage of. They are available and have helped thousands of business owners all across the UK startup, expand and grow their businesses. However, grants are not for every person, not available for every funding need – so be sure to understand your funding needs closely before you only focus on grant programmes.
In addition to government grants and the popularity of them, majority of those individuals who apply for small business funding from the government, end up obtaining the funds via a government loan.
While very different than traditional bank loans, government loans are very misunderstood, however one of the easiest programmes to obtain funds from.
Many different loan types exist as well, so let’s take a look at those:
- Low interest loan
- No interest loan
- Government guaranteed loans
- Conditionally repayable loans
A low interest loan or a no interest loan is basically a regular loan; however unlike the banks, where they don’t change the borrowing rates or repayment schedules, low interest loans can often be much lower or even have no interest applied to them; making them one of the most popular governmetn loan programmes one can apply for.
Government guaranteed loans are loan programmes that are backed by the governmetn. Sort of like having the government be your guarantor/co-singer on the loan. An in case things don’t go right, the government agency providing the loan, covers a percentage of that loans repayment.
And finally, one of the best programmes to apply for if you have the opportunity to do so is the conditionally repayable loans where you negotiate with the governmetn on pretty much everything from the interest rate, payment schedule, amount..etc These loans can often help a business owner start up with conditions such as non repayment until profitability, or no payment for up to 3 years..etc
Tax Breaks and Tax Credits:
In addition to the popular government grants, the “scary” government loans, comes a programme type tat actually funds more money into business ownership than any other programme. Yep, you guessed it, tax breaks/credits.
Tax breaks and tax credits are pretty much refunds on your taxes for the business. They are funds you obtain for money you spent on your business.
However many people stay away from them as you don’t get the funds right now and you have to spend your money first in order to get a tax break or credit. This is not something startups want to do, especially when money is needed now.
But those that do follow up and utilize this wonderful programme are able to get a fat credit at the end of the year!
Now that you’re aware of the different types of government funding programmes, it’s time for you to get started with your own search.
Be sure to have your business plan ready!