What business grants are available?

Tuesday 6 December, 2011

By Helen Thomas - helen@consumerchoices.co.uk

If you run a small business you could benefit from one of the numerous grants available.

Regardless of whether you have a small business or are still just thinking of starting one up, it is likely that money is of paramount concern.

Whether it is to ease cashflow worries during the start-up phase, or to help take your fledgling business to the next level, getting funding for your business can be the difference between success and failure.

So, short of grand larceny, printing your own cash or risking your personal wellbeing through dealings with a loan shark, how can you access the capital to grow your business?

The answer is by getting a grant. A financial one, not Hugh.

There are significant amounts of cash available to businesses but unfortunately, navigating your way through the grant jungle can be a daunting task.

With public funds, made available from an array of UK government departments (as well as the Scottish Parliament and the Welsh and Northern Ireland Assemblies), the European Union, regional development agencies, local authorities and a whole host of other “awarding bodies”, there are a range of grants available to people running their own businesses:

• Start-up grants - This is the avenue to take if you are looking to cover start-up costs or to expand your business.
• Training grants - In the early days of a business when your focus is primarily on making ends meet, funding for continued training is often sacrificed in favour of paying staff or keeping an office roof over your head.

  This is where grants can be really helpful - covering a proportion of something that will be truly beneficial to your business in the long term but which is unlikely to happen without support.

  See www.traintogain.gov.uk

• Grants for Business Investment (GBI) - A national business support scheme available in “assisted areas” of England. Its objective is to assist the development of disadvantaged regions by supporting sustainable investment and job creation. In Scotland the scheme is called Regional Selective Assistance (RSA) and in Northern Ireland it is called the Enterprise NI Loan Fund (ENILF).
• Inventor grants - If your business is based on a really original product, you may be eligible for a grant to inventors. These can include funding for research and development, facilities for innovation and support networks.

As well as funding various business development processes, there are also a multitude of grant types available:

• Direct grants - Cold hard cash, but generally on the proviso that your business co-funds up to 50% of the costs needed. This award is usually for training, employment, export development, recruitment or capital investment projects.
• Repayable grant - Unfortunately this one isn’t a keeper. Funds have to be repaid from future revenue, however, it could tide you over a difficult period and if the project is unsuccessful the funds are often written off.
• Equity finance - A capital injection but instead of repayment, the provider takes a share of the company. However, unlike venture capitalists, public funders have less aggressive terms.
• Soft loans - Like a standard loan but with softer edges, such as a lower interest rate or even no interest at all, or a longer repayment term.
• Free or subsidised consultancy - If it is a particular skill or area of expertise that your organisation needs, which cannot be developed from within, consultancy could be the answer.

There is also a multitude of non-cash business support available in the form of access to resources, cost sharing between small businesses and the transfer of best practice and technological advances between companies.

Unfortunately, although it is likely there will be a grant suitable for your business out there, they won’t come to you unsolicited. You will have to do the leg work yourself.

Keep informed and develop a great business plan so when you are ready to apply, you will stand the best chance of success.