Getting a grant for your business

Getting grant-funding could really help your business develop and grow. But even experts can find it difficult to keep track of the hundreds of different grant schemes which keep appearing and then disappearing. This briefing outlines the kind of grants available to small and medium-sized businesses. It explains the criteria a project must meet to qualify for a grant, and the potential benefits and pitfalls involved in applying. The briefing covers:

• Which business activities are most likely to qualify.
• Factors that could affect your eligibility.
• How to identify grants you might be entitled to.
• How to apply.

1. Be prepared

Do not waste time trying to get a grant unless you are prepared to overcome four potential obstacles.

1.1 You must be ready to put up some of your own money.

• It is extremely rare for a grant to finance 100 per cent of the costs of any project.
   
• Grants typically cover 15 to 50 per cent of the total finance required for a project.

Even if a larger proportion of the project cost is available, you will still need to invest time and resources in researching and applying for the grant.

1.2 Grants are usually only available for specified projects. For example, developing a new product, or setting up a specific training programme.

• The normal, organic process of company development does not usually qualify.

1.3 You must have a clear project plan.

• You will probably need to show how the project ties in with the strategic direction of your business as outlined in your business plan. (See Writing a business plan.)

1.4 Grant schemes almost always impose certain restrictions.

• The project must not be under way already.
   
• The project must help towards achieving the objectives of the grant provider - usually a department or agency of local, national or European government.
   
• In most cases, you must be able to demonstrate that the project would not take place and achieve the same benefits without the grant.

2. Nationwide grants

Nationally available grants usually focus on particular business purposes or activities.

2.1 Support is often available for businesses looking to export.

For additional support and guidance contact your Business Link

• The Department of Trade and Industry’s UK Trade & Investment offers funding to help exporters, as well as a range of charged-for, but subsidised, services. Contact your local Business Link or UK Trade & Investment (020 7215 5444 or www.uktradeinvest.gov.uk).

2.2 There are various sources of funding for joint research projects undertaken by businesses and academic institutions.

• The Government’s LINK programmes support partnerships between UK companies and research organisations which develop products and processes in a range of technology and market sectors. Visit www.ost.gov.uk/link or call 020 7215 0940.
   
• The European Commission’s CRAFT programme provides funding to small and medium-sized businesses wanting to take part in EC research framework programmes in the field of science and technology. Visit www.cordis.lu/sme.

2.3 There are grants designed to help companies innovate.

• A range of funding is available under the Small Business Service’s R&D Project Grants scheme, which replaces the Smart scheme. The scheme’s awards process places increased emphasis on proving your
  company’s financial health. An associated grant to investigate an innovative idea, to help businesses prepare for innovation has also been launched. Call 0845 600 9 006 or visit www.businesslink.gov.uk.
   
• Businesses in Wales wanting to develop new products and processes can apply for grants of up to £25,000. Contact Regional Innovation Grants (029 2082 8730).

2.4 Some grants are designed to help protect the environment by reducing pollution or waste.

• For example, the government-backed CleanUp initiative provides funding of up to 75 per cent of the cost of fitting emissions-reduction equipment to polluting vehicles (www.cleanup.org.uk or 0845 602 1425).

2.5 You may be able to get funding for training and skills development.

• Assistance is generally provided through Business Link and the Learning and Skills Council. There are many other grants available (see 4).

3. Special grants

Other grants are available depending on the location and type of your business.

3.1 The location your business operates in may entitle you to a grant. You may be eligible for a range of special grants and support from both the UK Government and the European Commission if your business is in an economically depressed area, especially if it is one with high unemployment.

• These areas include those in general industrial decline, those where major traditional industries such as steel, coal, textiles and fishing have collapsed, and some rural areas and inner-city areas.
   
• There are several different tiers of funding which reflect the relative economic needs of different regions. At present Cornwall, Merseyside, South Yorkshire and West Wales and the Valleys get the most support.
   
• Businesses in areas which receive high levels of support may be able to apply for Regional Selective

Assistance, which provides partial funding towards projects with a fixed capital expenditure of over £500,000 in England. Different levels of funding are available elsewhere. Apply for a Regional Enterprise Grant if your capital requirements are less than this. Projects will only qualify if they create jobs or safeguard existing
ones.

For more information, contact the Government Office for your region. Your local council or Business Link may also have its own schemes to help combat specific local problems.

3.2 Although many grants are available across most sectors, some sectors may be specifically targeted for extra funding.

• Industries that may receive specific support include rural diversification, crafts, tourism and agriculture.

For additional support and guidance contact your Business Link

3.3 Some grants are only available to businesses of a certain minimum size.

• A lot of government support is targeted at growing businesses, rather than one-man bands.

3.4 Some grants are intended to help new businesses and boost employment.

• Local support (e.g. subsidised rent and rates) is often available to encourage small businesses to start up in particular areas.

A project to build a new factory on derelict land in a depressed area, with the potential to create new jobs and boost exports, might qualify for several different grants.

4. Identifying possible grants

There are many different grant schemes in existence. You need to identify the few grants your business or project could be eligible for.

4.1 Contact your local Business Link (0845 600 9 006 or www.businesslink.gov.uk) or other business support organisation. Most have access to a European Information Centre and to Grantfinder, a database which will identify appropriate European, national, government and charitable grant schemes. Basic information is usually free.

• Ask for a list of grant schemes (including contact details) your project might qualify for.
   
• A business adviser will probably be available to help you narrow down the range of schemes.

4.2 Try other sources of free or subsidised information.

• These might include your bank, your trade association or the Department of Trade and Industry.
   
• There are a number of free and subscription websites that list available grants. By answering a few questions you can pinpoint a shortlist of grants that you might qualify for. Try www.j4bgrants.co.uk, www.grantnet.com and www.govgrants.com.

4.3 Talk to the administrators of any grant schemes which seem to fit your situation. These might include:

• The European Commission. Avoid calling the Commission’s main switchboard. Instead, send an email or phone the section which deals with the scheme you are interested in, using the contact details provided by Business Link.
   
• Government departments, such as the Department of Trade and Industry, and the Department for Transport, Local Government and the Regions (DTLR).
   
• Business Link, local councils or Regional Development Agencies.

4.4 If necessary, get professional help.

• It is probably worth paying for help to apply for any grants potentially worth £50,000 or more.
   
• Experts can help you to ‘model’ your project so that it is more likely to meet the qualifying criteria of the grant.
   
• Some accountants and consultants are grant experts. Check their experience of successfully obtaining grants for businesses similar to yours.
   
• Negotiate the fees. Flat-rate fees may seem less expensive in the first instance, but must be paid even if you do not get a grant.

See Using a consultant.

5. Making a start

5.1 Make personal contact with an individual involved in administering the scheme.

• You will get advice on whether it is worth applying.
   
• You can often get help to complete the application form.

For additional support and guidance contact your Business Link  Representative