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A start-up’s guide to small business grants and how to get a grant

If you conduct a straw poll of would-be UK entrepreneurs about what has stopped them from turning an innovative idea into a new business the answer is often access to funding, or lack of. Similarly, if you ask a thriving small business what is preventing them from scaling up then the answer is often the same; money.

To help you access vital funding for your business, this guide discusses the UK's top small business grant providers and looks at who can access them and how to apply.

What are small business grants and start-up grants

They say money is the root of all evil. Finance lawyers don’t agree. Their mantra is that money (or rather a small business grant) is the root of many a successful small business.

A small business grant is provided by a grant holder for a specific business purpose whilst, as the name implies, the start-up grant is designed to help with some of the start-up costs an entrepreneur has to find to turn their business idea into the beginnings of a business.

The point about a small business grant or start-up grant is that it is non-repayable, provided you use the money for the intended purpose. That’s a significant advantage in comparison to bank lending or a loan where capital and interest are re-payable. It’s also an advantage to where an equity investor wants a share of your business in return for start-up or growth capital.

Should I apply for a small business grant?

If it sounds like small business grants are too good to be true, it’s best to be aware that:

  • The small business grant application process can be complex and time consuming with no guarantee of success at the end. Some, but not all, start-ups say their time would have been better spent in securing bank or equity finance, or in securing sales.
  • To secure a small business grant most applicant businesses will need to agree to the objectives or goals specified by the grant provider.
  • You will need a watertight business plan to get the funding.
  • You will need to meet the conditions of the small business grant. For example, the grant provider may say the money is to be earmarked for developing your product to market whereas you may think the money would be better used elsewhere in the business.
  • There is normally an ongoing reporting requirement that includes provision of financial statements and projections.

If you aren’t sure which way to turn our finance lawyers specialise in pre-seed and seed funding and can talk you through your options.

Who provides start-up and small business grants?

Start-up grants and small business grant are normally made available by:

  • Government agencies
  • Public-sector organisations
  • A limited number of private-sector organisations for example Unilever 
  • Charitable organisations

For entrepreneurs, it is important to focus the content of your application on what the grant provider is looking for. For example, some organisations offering small business grants or start-up grants want to encourage businesses in an underdeveloped part of the country or among certain demographic groups or in a particular industry sector, such as tech, health innovation or green technologies.

How to find start-up business grants 

If you’re looking for either a start-up business grant or loan the Department for Business, Energy & Industrial Strategy and the government website gov.uk is the best place to start your search. 

There is a handy, searchable list of sources of support and funding for start-ups and small businesses. You can filter the list of funding providers by specifying the type of business support you’re looking for, the stage your business is at, your sector, number of employees and your UK region.

The Grants Hub website offers tools to help you apply for a small business grant and lets you calculate the most suitable source of funding for your business.

If you are based in Wales then take a look at Welsh Government Grants Guidance. If you are in Ireland then Enterprise Ireland offers tips on how to secure grants as well as information on funding for retail, technology, and regional development.

Then there is industry and sector specific help for grants and loans such as the Innovation competitions - Innovation Funding Service.

In addition, here are details of some business support organisations:

  • The National Enterprise Network
  • The LEP Network
  • The Trade Association Forum – providing details of potentially relevant associations where you can get information on sector specific trade associations.
  • The Prince’s Trust - operates an Enterprise Programme designed to help young entrepreneurs under 30 to start their own small business. The Trust works with the British Business Bank and Start Up Loans Company to enable young people to access start-up funding.
  • UnLtd helps social entrepreneurs and social enterprise businesses created to address or meet a social or community issue or need. UnLtd provides awards if individual start-ups or social enterprise start-ups and scale-ups meet their eligibility criteria.
  • Nesta is a specialist organisation that is of interest to social enterprise start-ups and tech. Take a look at their help me innovate page here.
  • The Wellcome Trust provides grants and awards in biotech, life sciences and research and development. To access help with the search for the right funding take a look at their find a scheme page.

There are plenty of other organisations offering support and grants and often your solicitor or accountant can give you an idea of where to start your search so you can focus your efforts.

How to apply for small business grant

If you are interested in securing a grant, you probably have a few questions about the process, such as: Can I get a grant to start a business? How can I qualify for a small business grant? Can I get a small business grant to grow my business? Are there free government business grants?

The grant application process takes time and energy. It can be frustrating and painfully slow for some applicants but the wait and time spent in tracking down the best small business grant provider for your business idea or to scale up an existing company can be well worth the hard work.

There is no quick solution on how to apply for a small business grant as each entrepreneur has their own innovative business idea and regional base or sector. Whilst it is tempting to shoot off a whole host of grant applications in the hope that one will win, most professional advisors recommend a targeted approach to securing small business grant funding. That means research and discipline.

As each small business grant provider has their own criteria, priorities and processes, it means every grant application has to be tailored to the organisation and the specific criteria. It is amazing how many green start-ups don’t emphasise their green credentials when applying for a small business grant. That’s essential, especially when you do your research and find out how grant applications are assessed. The grant applicant that boasts about its green plans is more likely to get the grant than a grant applicant who assumes grant assessors will know how they plan to operate their business.

The Start Up Loans Company website article How to get a small business government grant also offers helpful practical advice.

In truth, it is a fierce competitive process to get a small business grant but many say it makes sense to try as if you succeed you get a financial boost to help you with your start-up or scale-up. For the losers, many say that they gained valuable lessons in research and focused preparation that then gave them a head start when looking for commercial finance.

Securing your small business’ future

The above grants are just a small selection of the funding that’s on offer throughout the UK. Some grants are only available temporarily, so it’s worth checking regularly to see whether one is available to you.

With some research, a little preparation and some good intentions, business owners can raise growth capital without relying on bank finance, equity investment or even friends and family. If you think you could be eligible for a grant, finding out is usually worth the effort.  

If you are looking for funding for your start-up or scale-up, you may also be interested in:

If you are grappling with where to start with turning your idea into a business take a look at our commercial legal articles on:


What next?

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