UK small business owners can access funds through the government’s grants programme.
Once the various levels of government have provided these funds, the business owner can put them toward any number of goals. Nonetheless, the government offers the loans in order to promote economic growth, employment opportunities, local community development, and entrepreneurship across the country.
Government grants are frequently misunderstood and viewed as a source of “free money” that can be used by entrepreneurs without any obligation to pay them back. However, there is a wide variety of government grants available.
- One time and renewable grants
- Non repayable grants
- Partial contributions
Any small business that is qualified for and able to receive government grants can benefit from doing so. We’ll get into the specifics of how these funds can be put to use later in the piece, but first, let’s go over the various government grant options available to you so you can get a feel for which one(s) might be the best fit(s).
Different types of government grants
If you hear the word “grant,” your first thought might be that it’s just money given to you by the government. While this is technically correct, there are actually many different kinds of grants out there.
One time government grants are grant programs, often offered by the local, provincial and federal governments that help fund a businesses expenses which often require a time time contribution, thus the meaning “one-time”.
These grants are often focused on helping with a specific funding requirement a business may have; liek renovating a business location, to accommodate what the business needs. These renovation expenses are one time.
Whereas the renewable government grants are grant options that a business may apply to multiple times, over and over if funds are needed. While it is not guaranteed that the funds of the grant program will be approved each time, a business may use these funds for expenses that they may have, which are reoccurring; such as: paying wages, providing staff training, energy and efficiency purposes..etc
Further that, the most popular programs are the non repayable government grants. These grant options are the most desired as they are non-repayable.
What this means for businesses is that they can immediately put the money to use without worrying about how they will pay back the loan. In exchange for these grants, the government agency offering them expects you to succeed in business, to hire people, to pay taxes, etc.
Lastly we have the partial contribution grants. These grant program types are available, however are often ones that business owners shy away from – due to the fact that they often require a contribution from the business owner directly, in order to be eligible.
In order to qualify for this grant from the government agency, you will need to put up some of your own money as a partial contribution. The range of possible returns on this investment is 10%–85%.
Due to a lack of available capital, most startups and business owners have to ask for financial backing from others. This makes it challenging to obtain or even consider partial contributions.
What can government grants be used for?
Great question, and one that can get a lot of confusing answers; let’s sort it out.
Any number of legitimate business needs can be met by applying for and receiving government grants. While some generalizations may be possible, it’s not a black-and-white situation in which every company will achieve the same result. Several things are essential to grasp:
- Not all government grants are for everyone, or for every type of business
- Government grants are in place to ensure that more than just your business benefits
- To really understand what a grant is for and how the funds can be used, review the application and program requirements
To elaborate, hundreds of national grants are available all over the country. There are restrictions on who can apply for these grants, and not all funding requests can be met.
In most cases, government grants are awarded to businesses whose expenses are directly related to the agency’s stated mission. You, the business owner, should carefully read the application’s requirements and criteria before submitting it.
Government grant agencies exist for and work toward a particular objective. These targets are typically oriented toward the organization’s stated purpose.
It’s important to understand the goals of the grant programme you’re applying for so that you can put the money to the best use and increase your chances of being awarded it.a
Most grant programs will help cover the following costs that a business may have:
Wage support ( money to pay yourself or your staff )
- Costs of training (to provide your staff with proper training skills for the job)
- Tools and equipment costs (especially if tied to a mission that a agency has in mind)
- Energy, going green and improving efficiency (especially if environment focused)
- Research and development costs
- Leasehold improvements and renovation costs
Government grant programmes can be used for more than just these purposes, and in some cases, the money can be put toward things like advertising, stock, equipment, and even the purchase of new businesses.
Tips for getting government grants
Some advice before you begin the application process for government grants.
- Always prepare your business plan beforehand.
- Ensure that your business plan is detailed and provides a breakdown of what you need funding for; and how much
- Have your 3 year projections ready and be prepared to explain how the added government grant, or funding will be of help.
- When you locate a grant program, ensure that you read the application and program requirements top to bottom. Look for a few key things:
- Does this grant program cover businesses in your location?
- Is the grant program right for businesses in your industry?
- The funding needs you have, can they be covered by this program?
- The amount of money you need; is it achievable
The next step in applying for the grant programmes is to make sure you have addressed the aforementioned items.
Do keep in mind that alternative government funding options are also available, including government loans, guaranteed loans, tax breaks and credits; which also may be of help if used in combination with the government grants. See all government funding options in the Funding Database.