It’s tempting to look on grants as free money.
After all, unlike a bank loan, you won’t be required to repay cash given to you in the form of a grant and you certainly will not have to surrender any equity in your company.
But securing a grant can be tricky. Business grants are normally awarded to fund specific projects and in order to be eligible you’ll have to comply with some pretty stiff criteria. And you shouldn’t expect to receive 100% funding. Government and its agencies – the main providers of grants – generally demand that applicants match any funds awarded with their own financial contribution. Nevertheless, business grants provide a useful source of funding.
BUSINESS GRANT PROVIDERS
A bewildering number of bodies provide business grants. These include the European Union, UK central and local government and bodies such as Business Link, Regional Development Agencies, Chambers of Commerce and County Enterprise Boards. There are also small business grants available from charities and private sector bodies, such as the Prince’s Trust.
The availability of a grant tends to be closely tied with activities that are being encouraged by policymakers. Thus there are grants to fund innovation, research and development, training. and regeneration. Under the government’s new deal, there is also money available to back employers who take on and train young people. There are also small business grants to support start-ups by young entrepreneurs, an area where the Prince’s Trust is particularly active.
ELIGIBILITY
The rules vary but under normal circumstances your eligibility for a grant will depend on a number of key factors. Firstly, you should have a specific project in mind that meets the criteria of the business grants. New ideas are favoured, so your project should be in the planning stage (rather than already started) and you will need money to match any award.
PROS AND CONS
Grants can provide finance with no repayment or equity costs involved, but the application process can be time consuming with no guaranteed result. Competition can be intense, so you can’t assume a successful outcome.
NEXT STEPS
Details of grant awarding bodies and projects they fund can be found on the Business Link website (businesslink.gov.uk). You’ll also find helpful advice and information at the British Chamber of Commerce website, www.chamberonline.co.uk, as well as www.englandsRDAs.com, www.scottish-enterprise.com, www.new.walesgov.uk, www.eugrants.org, www.investni.com and www.grant-guide.com. To obtain a grant, you will have to write a detailed proposal, explaining the objectives and benefits of the project.
