You may need access to funding to grow your business – to buy equipment, employ staff or cover marketing costs.
Use our blog series to learn about the finance options available and the advantages and disadvantages of each method.
Part 7: Grants (Non-Repayable Finance)
Grants are funding given by government and organisations to support new and existing businesses in certain economic sectors or localities.
For example, start-ups in an economically deprived area; businesses addressing under-representation of minority groups in a sector; or companies tackling green issues.
Grants range in size from £100 to £500,000 and more. Usually, the larger the grant, the more complex the application process is.
Each UK grant has different criteria for businesses they will fund. These change quickly so be sure to check their websites for latest offerings.
- Do not have to repay the funds
- Keep ownership of your business
- Non-monetary support such as expertise, offices and resources
Disadvantages of Grants
- Often for small businesses
- Could be offered too little
- Often lengthy process
- Often for tangible purchases not working capital
- May be match funded, so business must finance a significant percentage of overall project cost
- Must report progress and possible claw back if targets not achieved
- Avoids need to develop profitable business model
- Often for social enterprises, definitions vary
- Can cause ‘mission drift’ where objectives shift to win funds only
- Can run out once allocated amount used, or not be available next time due to priorities changing
- Uncertainty with EU finding
- Time/costs wasted if unsuccessful
Grant Funding Examples
Priority Areas :
Childcare Business Grants Scheme – to set up childcare businesses.
Apprenticeship Grants – practical training and job-based learning for 16-24-year-olds.
SBRI initiative – research or development of new products or services to solve public-sector problems.
KTP grants – employment of recent graduates on innovation projects with a supervised partner, in charitable, educational or private/public sector research organisations.
Horizon 2020 – working throughout a value chain, accessing technology, science and expertise and finding test opportunies and solutions
Collaborative grants scheme – accelerated technology research to develop new products, services or processes in science, technology or engineering.
Catalyst grant programme – initiatives to create new knowledge or groundbreaking/innovative products, services or processes. Industrial Biotechnology, Energy, Agri-Tech and Biomedical, at early-stage (feasibility studies), industrial research (prototype) and late stage (testing).
Energy Entrepreneurs Fund – advancement of cutting-edge energy technologies.
Princes Trust – start-up grants for 18-30 year olds.
The Environment Now – grants to young people (17 – 24) for innovative ways to use digital technology to solve environmental issues.
Grants for the Arts – support organisations and individuals in visual arts, dance, theatre, literature, music.
Science & Technology
Innovation Vouchers – develop innovative ideas or products with expert know-how from universities, consultancies and advisers.
Smart Grants scheme – science, technology and engineering start-ups. To research and create breakthroughs at Proof of Market, Proof of Concept and Prototype Development stages.
The Prince’s Countryside Fund – helps rural communities make long-term positive impacts on working and living.
Forestry Innovation Fund – to fund projects that promote growth of the forestry industry within local regions.
Trade Show Access (TAP) – help UK businesses promote themselves abroad by visiting overseas trade shows and get expert advice.
Heritage Lottery – non-profit start-ups, based on projected outcomes
Barrow Cadbury Trust – non-profits for social change and equality
Spaces 4 Change -support young social entrepreneurs to take ownership of under-utilized spaces in their local area for office or retail use.
Feasibility studies – testing new business idea, including new product, service and process development.
New Enterprise Allowance – support unemployed becoming self-employed.
National Lottery Awards For All – organisations working in local Welsh communities for positive change.
Improving Lives – work with people in Scotland who overcame difficulties and built resilience.
Tax Incentive Examples
R&D Tax Credits – reclaim significant amount of innovative science or tech development costs per year.
Reliefs for Creative industries (CITR) – for companies making profit from theatre, film, television, animation or video games.
Enterprise Investment Scheme (EIS) – for investors in later stage start-ups.