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What Are Small Business Grants, And How Do You Apply?

Posted 2 years ago

What Are Small Business Grants, And How Do You Apply?
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Owing to the coronavirus pandemic, securing funding for your business is proving to be an even greater challenge for entrepreneurs. With a range of loan schemes available, as well as other sources of capital, it can be difficult to know where to start. 

In this guide, we explain the small business grants, and how they can potentially kick start your company’s growth. 

What are small business grants?

Small business grant are just that: sums of money given to businesses usually by the government or a local authority for a specific project or activity, such as developing a project or even starting a new business. 

A government grant is, in essence, free capital that does not have to be repaid and, as such, is highly competitive and filled with strict eligibility requirements. 

There are a range of small business grants which are aimed at specific regions in the countries, industry sectors, types of businesses and even community groups. So, for example, certain grants might only be available to businesses that are run by women. 

Types of business grants

From cash rewards, to generous tax relief, there are hundreds of business grants available to entrepreneurs. However, there are typically four main types of small business grant:

Direct grant 

This is the most well-known type of grant that is available to businesses and usually comprises a lump sum of money paid at the beginning or end of a project. An example of this is the grants provided by the Regional Growth Fund. 

Resource and training grants

These are useful for businesses that lack the resources required to develop projects. These are usually a non-cash grant, in the form of vouchers, worth up to £5,000 to use for enlisting the help of experts in a particular area of business. 

Soft loans 

These are often government-backed, and while not technically small business grants, they are a very attractive funding option. They offer far more generous repayment options than regular bank loans as well as low interest rates. Take the Start Up Loans Company, which offers business loans of up to £25,000 at 6% interest. 

Tax relief

There are a number of tax relief schemes available that allow businesses to reduce the cost of tax liabilities. The best example of this is the Employment Allowance Scheme which allows you to reduce your National Insurance bill by up to £3,000 a year. 

How do I apply for a business grant?

  1. Before you apply for a grant, ensure that your business fulfills the specific requirements of the scheme. 
  2. Ensure that you have necessary funds to match the amount of grant money. Remember some grants require you to do this. 
  3. Make sure you give yourself plenty of time to complete the application. Many are long and complex and require documentation and other details. 
  4. Apply. 

Where can I find business grants?

There are literally hundreds of small business grants available to entrepreneurs across the country. To save you the time of manually searching for them all, we have created a comprehensive list of small business grants that you can apply for.

Authors: Sacha Bright & Oliver Murphy

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. Nextfin is not liable for any damages arising from the use of or inability to use this site or any material contained in it, or from any action taken as a result of using the site. 

Tagged: sme raising funds entrepreneur coronavirus alternative finance



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