For many small business owners, getting a government grant with few strings attached could sound like the dream scenario. While every scheme is different and nothing is guaranteed, a small business grant from the government could help a start-up find its feet and grow as a company. But what funding is available for businesses like yours? Find out here.
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Tips for applying for a government small business grant
Let’s cut straight to the chase: there are many local, regional and national government-backed grants for businesses listed on GOV.UK, which could be your first port of call. Each funding pot will have different processes and eligibility criteria, so it may be worth reading-up on the various grants available before completing any application paperwork.
Once you’ve chosen which small business grant fund to target, there are some steps to take to ensure your application has the best possible chance of success. For example, you could undertake the following measures to give those holding the purse strings greater confidence in your business venture:
- Write a business plan that outlines your company’s vision and key personnel.
- You may want to ensure you have up-to-date accounts, with no large debts or outstanding tax bills.
- You may want to check you have funds available to match a potential grant offer, as some grants look to match the amount you’re willing to invest. A positive cash flow may help.
- Why not get your application in as early as possible? For some grants, the funds may be allocated soon after the scheme launches and they may have a limited pot of funds to invest.
- Contact the awards body if you have any questions about your chances of getting funding. This could improve your understanding of what they’re looking for, or save you valuable time if you decide not to apply.
- Ensure you’re clear about which grants you’re looking for. For example, are you worried about business rates ? If so, you could look into business rates relief. Or you could research grants for other expenditure, such as a refurbishment of your premises, or cash for equipment.
Examples of small business grants
As we’ve covered, there are many grants available for small businesses that may be of interest depending on your needs. Here is a short list of some established grants you could consider:
- Innovate UK – government-backed ‘innovation funding’ to enable businesses to research and develop a product or service.
- The Prince’s Trust – offers small business funding opportunities for 18 to 30-year-olds. Discover how Tyl has supported The Prince’s Trust through our Giveback Community Fund (fees and eligibility criteria apply for users of Tyl).
- New Enterprise Allowance– offers support for unemployed people to get their business idea off the ground.
- Gigabit Broadband Voucher Scheme – a government grant which contributes funds towards broadband connectivity for small rural businesses.
Other ways to get funding as a small business
Small business loans
Arguably, the traditional way of getting small business funding is to make an appointment with a high street bank and get a business loan. You can aim to develop a relationship with the bank, who will get to know your business and hopefully, enable you to borrow some money that you eventually pay back over time as your business grows. If you’re able to secure a loan either through your bank or through a service (there are many out there so make sure you do your research), you could use this money to grow your company – from hiring staff to buying equipment or even investing in marketing. Of course, the money will need to be repaid, and if you take out a secured loan, your business’s assets could be used as collateral if the bank calls in the debts.
Another way to fund a small business could be through venture capital (VC). This is where investors identify high risk (but often high return) emerging business propositions in their early or mid-stage of development. It’s often associated with tech companies, like Airbnb or WhatsApp (although many other tech companies have been funded in this way), as they begin to ‘scale-up’. While a VC investor could help your business attract funds, they may be looking for a quick return and to grow the business rapidly, rather than a long-term business partnership.
To find out more, explore these government-backed venture capital schemes for small businesses.
Angel investors are often high-net worth individuals who invest their own capital into a business. This makes them distinct from venture capitalists, who invest money that could be from multiple sources, such as private companies and pension funds. Angel investors are often well connected, and in exchange for their money, will often look to take shares in your business.
Digitally-savvy business owners could consider crowdfunding as a way to attract some investment. Crowdfunding websites such as Kickstarter and Indiegogo give you the chance to raise money from online contributions. If you’re happy to offer rewards and incentives to those who donate, crowdfunding could be an inventive way to raise cash.
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This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.
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