Over 1,000 funding programmes are available from the UK government to assist entrepreneurs and small business owners. Collectively, these funding programmes provide billions of pounds annually to encourage entrepreneurship, grow the economy, and create jobs.
Small businesses, whether just starting out or seeking to grow, can use the money to cover the many expenses associated with doing so.
It’s not entirely clear how to apply for government funding in the UK. There are more than 1,0500 funding opportunities in the UK, but most people only hear about the top 5–10 opportunities because those are the ones that are the most well-known and, therefore, the most competitive.
The public’s unfamiliarity with the application process for government funding is largely attributable to these 5–10 programmes, which are often the source of misunderstanding or confusion for the rest of the 1,000 options available.
So, today we’ll discuss the UK government funding application process.
UK Government funding types
These initiatives usually belong to more than one category of government funding, despite the fact that there are over a thousand options available.
Examples of available funding are:
- Government grants
- Government loans
- Tax breaks/credits
Grants from the government are essentially free money that can be used however the recipient sees fit. Grants are typically more difficult to qualify for than other financing options because recipients are not required to make repayments. These alternatives cater to the unique requirements of each business, boosting both their bottom line and the local economy.
Like traditional bank loans, government loans are a type of funding programme that provide a business owner with money to spend however they see fit, with the understanding that the loan will need to be repaid at some point in the future. It is not uncommon for governments to impose repayment conditions on loans, or to offer such loans at extremely low interest rates or even for free. Useful in the early stages of business and beyond.
Like the refunds you receive when filing your personal taxes, tax breaks and credits are essentially “free money” options provided by the government. These plans pay for everything, and some of them even offer year-end rebates. Unfortunately, you need to have already spent the money in order to be eligible.
What can government funds can be used for?
Each of the funding initiatives serves a specific objective. All of these resources exist because various levels of government saw a need in a particular field and set out to fill it.
Most funding mechanisms serve a single, specific goal. It is up to you, as the business owner, to know exactly what it is you need the money for so that you can categorise your requirements and apply to the appropriate programmes.
An entrepreneur can put the money toward a wide variety of goals, such as;
- Business startup costs, or acquisition costs
- Research and development costs
- Hiring, wage support and training costs
- Tools and equipment purchase
- Supplies and inventory purchase
- Marketing and branding costs
- Web development costs
- Leasehold improvements and renovation costs
- And more…
Since not everyone can receive every available form of financial aid, it’s important to carefully assess your situation before applying to any programmes.
What to do to apply for the funding?
There are prerequisites in order to submit a grant application.
Firstly, you either need to be a British citizen or a permanent resident of the United Kingdom, or at the very least have a British partner.
After the groundwork has been laid, a successful application requires the following materials and information: a complete business plan; a clear and easy-to-understand breakdown of your funding needs (what you need funding for); typically, a 3-year projected financial statement explaining your financial situation; and knowledge of which programme to apply to.
The last thing you want is to get denied because you didn’t have a business plan or applied to the wrong programme.
Remember, the business plan is and should always be your first step. To get a business plan started, you can use the business plan builder tool.
The funding process
How does one go about submitting a grant application to the government?
Given the wide variety of funding options, it stands to reason that every application will have its own distinctive steps. Furthermore, each individual seeking government funding may have unique experiences.
Fundamentals are consistent, though. Make sure you have all the essentials in place before beginning the application process.
- Do you have your business plan ready?
- Does your business plan explain your funding requirements? (what you need funds for)
- Do you know how much you need? (best to explain per requirement)
- Do you have your financial statements or financial projections ready (3 years)
- Do you know which funding program to apply to?
- Does the program you want to apply to cover the specific needs you have?
- If yes, is it available in your location; or your industry?
- Did you read the funding applications in full?
The instructions/checklist should be followed precisely. Applicants risk having their applications rejected if they are missing any of the items on the list.
Assuming you have already found a funding program you want to apply to, you are ready to move ahead with the application process. If not; you can always use the Funding Database to locate any of the government funding options – to help you narrow down your choices.
The time it takes to complete your application after you’ve started can vary anywhere from a few minutes to a few days. However, once applications are submitted, you can expect to hear back from the agency anywhere from 2-6 weeks later.
You should expect the agency to look at both your application and others during this time (as was explained above).
If you get a response, it means you’re either being asked to fill out more paperwork or you’ve been accepted.
However, if you receive a letter or email denying you funding, or if you don’t hear back within that time frame, you can assume that your request has been rejected.