How and Where to find Grants for your Small Business?
Small Business Grants – What are they?
Small businesses, especially those just starting or in the process of substantial expansion, require sufficient financial support to survive in the competitive market. Entrepreneurs need sufficient money to purchase business space, equipment for manufacturing, and other supplies. Finance is also required to take care of employee wages and for new talent recruitment. There are various avenues through which capital for business can be secured. Business owners can approach banks, venture capital companies and private business angels, or secure money against assets. The other option is to approach the Government for small business grants.
In UK, small business grants are provided by the UK Government: the European Union, and local and Regional Development Agencies in England, the Scottish Enterprise in Scotland, the Welsh Development Agency in Wales, and Invest Northern Ireland in Northern Ireland, and other local councils and authorities throughout UK.
Small business grants can be described as monetary assistance provided to small businesses to serve their specific purposes and projects. Small business grants cover a portion of the total capital required by a company. On strict adherence to terms and conditions applying to a grant, businesses are free of liabilities to repay the granted amount.
The UK Government supports young, fledgling businesses by sanctioning small business grants, offering business expertise and advisory services. Acquiring Government funding can be tough however, owing to the stringent criteria for grant acquisition and stiff business competition.
Eligibility for Small Business Grants
A startup applying for a Government business grant must propose a project with a specific purpose for it to be approved for finance. Projects that are already underway are not eligible for Government grants. Companies must adhere to the strict rules applying to a grant to avoid repayment of funds. Most small business grants require their applicants to match funds. Government grants typically cover a percentage of total finance needed for business, the remaining portion to be paid by the business owner. Companies applying for small business grants need prove their capability to provide their share of the total capital invested.
Granting companies typically favor young companies whose business targets befit their own objectives. Before small business grants are sanctioned, thorough assessments of grant applications are conducted to ensure startups are compatible with their granting bodies. Companies offering small business grants aim for the commercial success of invested businesses and require high levels of commitment from companies securing grants. A business is eligible for a grant only when it fulfills all criteria specified under terms and conditions of the grant.
The purpose of companies applying for small business grants is important. Different companies have different business needs. Small business grants help fulfill a wide range of business objectives: purchasing machinery, developing market for products and services, hiring more employees, advancing business, etc. Small business grants also aid specialised business projects.
In UK, each of the four countries, England, Northern Ireland, Scotland and Wales, have their own assortment of small business grants available. The provision of these small business grants differ depending on the area in which a business is based. Businesses based in socially deprived areas, or those with a large unemployed population, get extra grant provisions from the Government. Local businesses, authorities or charitable organisations in some regional and local areas also offer small business grants.
Most grants require businesses to reach a specified number before it can secure financial help. A startup business size is determined by the number of professionals it employs, or its annual business turnover. Small or medium businesses with less than 250 employees are most likely to bag small business grants for their business.
The European Commission restricts grant acquisition by businesses in certain industrial sectors, and closely inspects all grant applications. Finance for business may be limited, subject to criteria by the European Commission.
Types of Small Business Grants Available
- Grant for Business Investment (GBI) cover cost for purchase of key company assets, employee wages and new recruitment. Those businesses classified as part of England’s Regional Development Authorities’ assisted areas, and having stimulated business growth and urban development, benefit from GBI.
- In England, the Selective Finance for Investment (SFI) is a substantial grant scheme that is provided to companies investing capital in assisted areas, that either create new job opportunities or safeguards existing employment. Companies who seek this grant must explain how the grant will facilitate project procedures in UK, and identify the grant amount required for project.
- Research and Development (R&D) Small Business Grants are provided for research on new business ideas, and continued research on and development of existing business ideas. Funding support can be availed by businesses in England through the European Union state aid R&D tax credit and National DTI Grant for R&D.
- Employment and Training Small Business Grants are organised under the Government’sLearning and Skills Council. These grants can be obtained through UK’s regional and economic development agencies for employees wanting to enhance their business skills. There are age, qualification and experience criteria requiring fulfillment before securing ‘Train to Gain’ finance.
- Environmental Small Business Grants provided under the European Union’s environmental schemes is small and region specific.
- Real Estate Development Small Business Grants are provided to meet the difference between cost of project execution and end value of the project.
Applying for Small Business Grants
Applications for small business grants must contain the following essential features:
- An up-to-date, detailed and clear business research report focusing on areas relevant to the industrial sectors specified by the granting body.
- A well-defined business plan including business project details. Applications must provide a satisfactory explanation of how business ideas will be executed.
- Statements on production, marketing, expansion, and management of business, etc, included in the grant application should be supported by strong facts.
- Applications must effectively communicate project benefits and the impact of business on the UK market and industry. It must explain how the grant funds will affect business success in clear terms.
- Grant applications should include work plans and details of costs involved. Granting companies will provide small business grants to companies who are able to prove their need for finance.
- Startups seeking small business grants must prove possession of matched funds.