Grants

Ensur­ing ade­quate finance is a fact of life if you run a busi­ness. Whether you are look­ing to expand, under­take a spe­cif­ic project or sim­ply fund your day to day pur­chas­es, finance is essen­tial.

Obtain­ing finance is not always easy, espe­cial­ly if yours is a small busi­ness and par­tic­u­lar­ly if it is a recent start-up. Bor­row­ing may be dif­fi­cult due to lack of secu­ri­ty.

A grant may be the answer.

What is a grant?

A grant is a sum of mon­ey award­ed, by the gov­ern­ment or oth­er organ­i­sa­tion, for a spe­cif­ic project or pur­pose. Nor­mal­ly it will cov­er only some of the costs (typ­i­cal­ly between 15% and 50%); the busi­ness will need to fund the bal­ance. One of the main fea­tures of a grant is that the mon­ey gen­er­al­ly becomes repayable if the terms and con­di­tions of the grant are not met.

This sounds quite sim­ple in prin­ci­ple. How­ev­er, in prac­tice, it can be some­what daunt­ing because of the huge num­ber of dif­fer­ent schemes in oper­a­tion and the fact that schemes are con­stant­ly chang­ing. Gov­ern­ment grants are dis­trib­uted through a vari­ety of min­istries, depart­ments and agen­cies both on a nation­al and local basis.  They are usu­al­ly for pro­posed projects only, so ensure you have not already start­ed the project oth­er­wise you may not be enti­tled to the grant.

The fol­low­ing web­site may help with ini­tial research into grant avail­abil­i­ty: www.gov.uk/business-finance-support-finder.

Grants can also be received through Local Enter­prise Part­ner­ships (LEPs), local author­i­ties and char­i­ta­ble organ­i­sa­tions.

Is my business eligible?

Many of the avail­able schemes are open to all with­out restric­tion. Eli­gi­bil­i­ty for oth­ers will gen­er­al­ly depend upon a num­ber of fac­tors:

• geo­graph­i­cal loca­tion of the busi­ness — for exam­ple some schemes are tar­get­ed in areas of social depri­va­tion or high unem­ploy­ment
• size of busi­ness — for exam­ple some schemes are restrict­ed to small or medi­um sized busi­ness­es – such as those busi­ness­es with few­er than 250 employ­ees
• indus­try or sec­tor in which the busi­ness oper­ates — for exam­ple some schemes aim to tack­le par­tic­u­lar prob­lems or issues affect­ing an indus­try sec­tor
• pur­pose of the grant — grants are often award­ed for spe­cif­ic pur­pos­es — for exam­ple pur­chas­ing a new machine or increas­ing employ­ment. Grant bod­ies often seek spe­cif­ic tar­gets which are often in line with their own objec­tives.

Applying for a grant

Before applying

Ini­tial research is essen­tial so that you know what’s on offer.

It is also nec­es­sary to ensure that you:

• have funds avail­able to ‘match’ any grant that may be award­ed (where this is a con­di­tion of the grant)
• need the mon­ey for a spe­cif­ic ‘project’ or pur­pose
• have a busi­ness plan
• do not start work on the project before the award is con­firmed.

Making the application

It is a good idea, if pos­si­ble, to make per­son­al con­tact with an indi­vid­ual involved in admin­is­ter­ing your cho­sen scheme. This will give you a feel for whether it is worth­while pro­ceed­ing before you spend too much time on a detailed appli­ca­tion. You may also be able to get some help and advice on mak­ing the appli­ca­tion.

It is also a good idea where you can to apply as soon as pos­si­ble after launch of the scheme. Many grant schemes run for a lim­it­ed peri­od of time; there will be more mon­ey avail­able at an ear­ly stage and the admin­is­tra­tors will be keen to receive appli­ca­tions and make awards.

The appli­ca­tion itself should focus on the project for which you are claim­ing a grant. It should include an expla­na­tion of the poten­tial ben­e­fits of the project as well as a detailed plan with cost­ings. You should ensure that your appli­ca­tion match­es the objec­tives of the scheme. You will almost cer­tain­ly need to sub­mit a busi­ness plan as part of the appli­ca­tion. It is impor­tant to show that the project is depen­dent on grant funds to pro­ceed and that you have match­ing funds avail­able.

Hearing back

This can take any­thing from a few weeks to a year or more. Your appli­ca­tion will gen­er­al­ly be assessed by look­ing at a vari­ety of fac­tors includ­ing your approach, your exper­tise, your inno­va­tion and your need for the grant.

Why you might be turned down

There are var­i­ous rea­sons why your appli­ca­tion may be turned down. The com­mon ones include:

• your indus­try sec­tor or field is not rel­e­vant to the body mak­ing the award
• your plan of action was not detailed enough or was unfo­cused and lack­ing in clar­i­ty
• you have not made it clear that the grant is vital to the suc­cess of the project
• matched funds are not avail­able.

Final­ly, if your appli­ca­tion is unsuc­cess­ful, ask for feed­back. This will help you to be more effec­tive when apply­ing for funds in the future.