Eureka! You have come up with a revolutionary idea that will allow you to quit your full-time job, work for yourself and what you believe in, and so you feel that you are ready to start up your own business. You have everything you need: the perfect business model, a dedicated co-founder and a goal pyramid that will have your business soar through the sky. But here’s the thing… You lack the capital needed to start a business. You need money for your products, your employers, and your expenses. But, while struggling with loans, investors, grants, and angel investors, finding the funding that suits your startup can be stressful.
When looking for grants, government grants are often passed out. The government has policies to support small businesses as they are a large source of economic growth in industrialized economies. As you scroll down eagerly to get the tips and tricks on finding the small business grant you’re looking for. Eventually, you will understand that many funding opportunities are often based on a specific location or sector or ring-fenced for a certain part of a business, like women empowerment or groundbreaking technological changes.
What Is a Grant?
The world of grants… Just type in the word and face the combinations of all sorts, from small business grants to government business grants and COVID-19 grants. Whatever you’re looking for in your startup, let’s clear the air first and understand what a business grant is. Business grants are not loans, and there are no fees of interest in the later period. They are a sum of money given by groups or the government to the founders or owners of a small business to reach their full potential and blossom. You know the costs of IT equipment, gathering a team, and saving from the interest rates are the backbone of a startup to survive.
Capital is one of the most important obstacles to get through when starting a business, and we have many stories of turnbacks on brilliant ideas only due to money issues. A good understanding of a grant, where you can get it and how it works for you is a milestone of the startup you are about to set up. We know how overwhelming the internet can be. So, to get you through the clutter on topics about startup business grants and loan organisations in the UK, we have prepared this guide for you to find the perfect grant and conquer the world with your stroke of genius!
Although there are many opportunities, from government grants to small business fundings powered by organisations, finding the right one can be tricky and tiring. From cash awards to tax remission, grants are given by the government come in all shapes and sizes. To break it down, we examined government business grants in 3 topics.
- Equity finance: This type of government grant can offer start-ups and young businesses income tax reductions if they’re less than two years old and have fewer than 25 employees.
- Direct grants: This type is when money is granted directly to a new business to cover its startup essentials, including equipment and staff training. Many grants will expect your business to provide 50% of the value of the grant.
- Soft loan: This type is government-backed and can offer repayment terms and conditions that may be more generous than those offered through banks and building societies. This could mean that your business will pay lower interest rates or enjoy longer repayment periods.
How Do Startup Grants Work?
As stated before, startup funding is a sum of money you keep to better your startup. It is not a loan that you have to repay after scaling up. With this in mind, let’s see how startup grants work and how you can use them for your business.
Many funds offered to small businesses are available to those within a specific local authority, have fewer than 250 employees, or have a turnover rate of less than £45,000 and a balance sheet totalling less than £39,000. Although this is a general frame, each fund has its own baselines. Therefore, doing the research right and pinpointing the correct grants program is a must. For example, among 150 business startup grants in the UK, we advise you to carefully read each “terms and conditions.”
Who Are Eligible for Grants?
According to the grant you’re applying to, there might be slight changes in the process. First of all, you should always check if there is a location restraint. For example, if you’re a small business from Scotland and applying for a grant that has a location limitation for London, you will be eliminated straight away. Another factor you should keep in mind is how up to date your idea is and what you will solve with your startup. Although this is not a definite and complete list, here are some hot topics of startups that will catch the eye:
Agriculture, Energy and Water, Creative Services and Media, Information Technology and Telecom, Biotechnology/Medial and Chemical, Consumer Products/Personal Services and Retail and Wholesale. For example, if you’re a transport startup, you can check out the grants guide here. Or, if you’re planning on building your business in the energy sector, you can have a look at the energy Entrepreneurs Fund by clicking here.
As you see, if you have a perfectly planned business model that shows your road map to success and what you want to achieve clearly and understandably, you are eligible for the new business grants the government or organisations are offering. To see the full list of grants given by the UK, check this link.
How to Get a Startup Small Business Grant?
Before sitting in front of your laptop to do some research on grants, there are a few things that should be clear to you. Which sector are you in? Which industry will your startup benefit from? What do you need the money for? How will you use the money, and how will you measure your success to prove that you have used your grant for the right place? After finding a grant, you can apply for, read every detail carefully because there are probably some bottom lines that differentiate each grant. You might need to report to the government or the funding owner about your funding and how the process goes on your side. Or you might need to provide documents on using the business funding you received for technological materials because it is a technology fund. Skipping any points would be a headache for you in the future -you might even be held accountable for fraud!
After choosing the right grant, make sure to see through with the whole process. Some might take weeks of detailed documentation and writing, but don’t give up; as you know, having capital in your business account will satisfy you in the future. Then, with everything fully prepared, you will send your application to the relevant address, and now, you wait.
If you’re looking for more information and resources to learn more about the small business ecosystem, here is a comprehensive small business checklist where you can find content that will help you, from starting a new business to finding the best accountant for your company.