Grants for small businesses – and how to apply

From direct cash to discounts on essential goods, we cover the different types of business grants and schemes available to entrepreneurs.

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Whether you’re a small business owner or an aspiring entrepreneur who plans to start a business, a cash injection is never a bad thing.

Especially in these tough times, with the current permacrisis, increasing rates of inflation, and the ‘survival mode’ small businesses are having to struggle through today. A business grant could be the thing that kick-starts or revives your business – by helping you purchase the tools and equipment you need to reach new heights, or simply as the crucial backing to achieve your business goals.

In spite of everything, there are still countless schemes out there to apply for right now, if you know where to look. In this article, we’re going to give you an overview of the grants that could work for your business, and what you can do to potentially get your hands on them.

13th September 2023 Update: Government commits £1 billion to support 100,000 small businesses

In a significant move to bolster small businesses across the United Kingdom, the UK government has allocated £1 billion through its Start Up Loans scheme.

The government website also notes that successful applicants will receive free support and guidance to help write their business plans, and up to 12 months of free mentoring.

To apply for a government-backed Start Up Loan of £500 to £25,000 to start or grow your business, click here.

What is a small business grant?

A small business grant is essentially a non-repayable amount of money that is afforded to entrepreneurs and small business owners by the government, a company, a philanthropist or publicly-funded scheme.

The cash awards vary greatly in pricing (from hundreds, to thousands) and are different to business loans in the sense that you often won’t have to pay back any interest, give away equity, go through as many checks or pay it back at all – though most business loans are still subject to tax. These are all big reasons why grants are revered as a fantastic option for start-ups.

With this money you can invest in education, materials, employees, training or equipment – all things you need to ensure your systems are operating at their best capacity.

Grants are typically awarded to encourage promising talents and give them the opportunity to pursue entrepreneurship, help new innovative programs become more widely known, fund worthy environmental or otherwise purpose-driven projects and stimulate the economy.

What types of grants are available?

The government’s ‘business finance support finder’ directory lists over 300 direct grant agencies to help you find the right scheme for your start-up.

Direct grants

A direct grant, as discussed above, is a cash award usually given to a business to support an initiative – repayment-free – so long as the funds are used for the intended purposes and in the time period required. There will also likely be regulations involved and agreements set in terms of how you can spend the grant money.

You can find all the direct grants by specific type that we talk about here if you read on, or in the table of contents section.

Resource and training grants

A good example of a useful resource and training grant would be Innovate UK, which provides a ‘voucher’ of £5,000 for you to use to enlist the help of an expert in a particular field for your business.

And as for resources, instead of directly providing you with more income, many come in the form of reliefs and help you save on the income you already make. These include:

For resources that aren’t resource and training grants (but are still valuable for gaining knowledge and info) there are a series of expert business support networks and initiatives – that share knowledge with beginner entrepreneurs – and regional support helplines where you can receive free, personalised advice over the phone.

England’s helpline is also accessible via email, web chat, Twitter, Facebook and Youtube.

Soft Loans

While not a grant, a soft loan is a special type of finance for entrepreneurs where the terms and conditions of repayment are more lenient than under normal circumstances. So, for example, the interest rates may be less, there may be no interest to pay at all, or repayment terms could be set for a longer period.

Soft loans aren’t actually classed as grant schemes (these you will need to pay back), but they are often government-backed and can offer an alternative form of support.

Hundreds of organisations offer soft loans and guarantees, like the government-backed Start Up Loans Company for example, who offer new business loans of up to £25,000 with a 12-month repayment holiday and business mentoring.

As of December 2022, The Start Up Loans Company has lent a total of £800m via 90,000 loans.

Not sure whether a grant is the best option for you? Don’t forget to look at our comparison of six popular sources of business finance!

Grants schemes for specific entrepreneurs

There is always the need for more specific, type-based grants, to ensure diversity, and so that everyone has an equal chance of accessing support. A few examples of these include:

Business grants for women

  • ‘Women in Innovation’ Awards 2023/2024: Innovate UK is offering 10 women up to £50,000 this year.
  • The Cartier Women’s Initiative: an international grant scheme that offers 21 successful applicants across the world access to workshops, networking events and of course, funding an average of £24,000 for semi finalists and £80,000 for the remaining 7 winners.
  • Female Founder Office Hours: are you in tech? Play Fair Capital has an initiative twice a year offering mentoring, investing and collaboration for entrepreneurs.

You can check out the business grants available specifically to women in our guide to grants and resources for female entrepreneurs.

Read more: Support groups and resources for female entrepreneurs

Business grants for young people

  • The Prince’s Trust: One of the most well known trusts for young people, offering mentoring, support and funding to entrepreneurs aged between 18 and 30.
  • UnLtd: Supporting young social entrepreneurs
  • Shell LiveWIRE: Providing finance for young entrepreneurs tackling the world’s energy and resource crises.

Business grants for social entrepreneurs

Big Issue Invest – (the investment arm of the Big Issue) – offer soft loans from £50,000 to £1m to socially-driven entrepreneurs, and ‘participation loans’, where repayment is linked to the future performance of the enterprise.

Business grants for unemployed entrepreneurs

Be The Boss: If you’re unemployed following service with the armed forces, you might be eligible for this scheme by the Royal British Legion.

Business grants for people of colour

Grants for LGBTQIA+ people

The Global Fund For Women supports female and trans-led initiatives with a main focus on businesses who are helping to advance human rights in their communities.

Grant schemes by authority

Government grants

The main government organisations which offer grants to small businesses are:

UK businesses can find a comprehensive list of grants available using the government’s ‘business finance support finder’ tool, which allows you to select specific funding options and search for grants by your business location, size, and type of business activity.

Local authority business grants

Local authorities, agencies and organisations can also offer capital to your startup as they aim to support and encourage enterprise in their local areas.

Set up by The Department for Business, Energy and Industrial Strategy, Local Enterprise Partnerships (LEPs) are a prime example of this in action: they’re voluntary partnerships between local authorities and the businesses in their region, with funds delegated from central government.

There are currently 38 LEPs at work across England with the goal of fuelling growth and enterprise at a local level, including in Liverpool, London, Sheffield, and Cumbria.

Check out this map to find out where England’s LEPs are.

Region-specific business grants

If you’re operating a business in Scotland, Wales or Northern Ireland, you might want to narrow down your search to grants offered specifically to businesses in those countries.

Business grants in Northern Ireland

Information about the Department for the Economy (Northern Ireland) can be found here but also have their own official website where they often offer grants.

There are a variety of grants on offer to Northern Irish businesses, including TechStart’s Proof of Concept Grant for pre-launch start-ups, and Invest NI grants for slightly older companies – which range from the Propel Programme to the R&D grant.

Enterprise Ireland is the Government agency in Ireland responsible for supporting Irish businesses in the manufacturing and internationally traded services.

A range of grant support can be found here, where you can search for grants by your stage of business development. You can also visit NI Direct’s business support page for more.

Business grants in Scotland

Depending on where in Scotland you’re based, you may be able to apply for grants offered by Scottish Enterprise, Highlands and Islands Enterprise, your local council and more.

Scottish Development International are also an option as they aim to help more businesses from around the world do business in or with Scotland.

Search the government’s funding options in Scotland here, or check out our list of the business grants available in Scotland.

Business grants in Wales

From the tourism investment support scheme, which supports tourism businesses, to the Ultrafast Connectivity Voucher Scheme launched in 2017, which aims to improve business’ broadband connections, there are a range of grants available to Welsh businesses.

The Welsh government offers a guide to financial help and grants on its site, with Business Wales and Wales Economic Resilience Fund two of its main support services for entrepreneurs looking to raise funding.

Try searching Business Wales’ finance locator to find one that’s right for you, or get an overview of the options available in our guide to business grants in Wales.

How to apply for a business grant

Each grant will have a different application process, with different entry criteria and requirements to fulfil and different processes to follow. But, as with most potential business opportunities, the reward is worth the effort.

First, you’ll have to do some in-depth research and find the grant that best fits your business before you start sending applications. You don’t want to apply for a scheme you’re simply not suited to or eligible for because that may prove a waste of time. For example, there’s no point applying for an age-limited grant such as The Princes Trust, if you are over 30 as you would be outside of the required age range.

Once you’ve found a grant you think your small business is eligible for, you can begin the process of trying to obtain it.

For your best shot during the application process, make sure you have:

  • A thorough, up to date business plan download a free business plan template here.
  • A clear work plan, including a breakdown of what you plan to use the money for.
  • A good account of your company’s business history – this will convince the awarding body that you are going to behave responsibly with the funding – using quality accounting software for your small business will make this task a lot easier.
  • An outline of how the awarding organisation will be meeting their objectives by awarding you the money.

Top tips for applying for a business grant

There are a few things you can do to shoot past the competition and give yourself the best possible chance of winning your chosen grant, especially if you’re determined and organised as you manage all the different elements, stakeholder connections and timelines (a good project management software will be useful to you here). Here are our top tips:

  1. Apply as soon as possible: the very best time to apply for a grant is when it first opens. Make sure you’re continually keeping an eye on the space so you know when a relevant grant is upcoming.
  2. Make a personal contact at the awarding body before you apply: if there are any problems or your grant application doesn’t seem to be progressing, it’ll be good to have someone to call who knows you and can possibly give you some personalised advice.
  3. Consider appointing a grant consultant: a grant consultant can help you to track down the grants best suited to you, saving you hours of research, and will also have a better chance of communicating with the organisation and keeping tabs on your application’s process. While they can be very helpful in some cases, there are some awarding bodies that don’t accept applications submitted through consultancies so take this advice on a case-by-case basis.
  4. Pay close attention to the grant’s objectives: if an awarding body wants to fund innovative solutions to the technological skills gap in the UK, for example, highlight and emphasise how your business is doing this (only if it actually is, of course). Be clear on the benefits your business will bring to the area of the grant’s attention, and explain that you need the money to fulfil these specific objectives.
  5. Don’t be untruthful: if you need to bend the facts about your business to fit with the grant’s criteria, it’s not the right grant for you.

How long does it take to get a business grant?

While there is no set guideline to how long an application can take as every grant process is different, the general rule of thumb is that the more localised the awarding body is to you, the faster you’re likely to get a result.

Applications to your local authority or a Local Enterprise Partnership, for example, could be resolved as quickly as a matter of weeks, or even days.

National organisations however are more bureaucratic and could spend months coming to a decision. Similarly, European bodies can take many months to process your application.

Grant eligibility

With so many grants on offer, you will need to dedicate time to finding the best one for you.

There are no businesses or industry sectors that are excluded from applying for financial assistance. But often grant schemes will determine which businesses are a good fit for their money based on a strict set of eligibility criteria, and you should use these to narrow down your options.

Such criteria usually include:

  • The business’ purpose: the industry you’re operating in (or plan to operate in), the problem you’re tackling, and the impact you want your business to have.
  • Where you’re located: separate regions across the UK have their own awarding bodies/schemes which focus solely on companies in their designated area. UK business owners will still have the opportunity to apply for EU-based grants via ‘Horizon Europe’, which has a budget of €95.5 billion and will run until 2027.
  • The size of your business: certain schemes are restricted to businesses which employ less than 250 staff, while others are stricter and only deal with firms that have fewer than say 50, 20 or 10 employees.
  • How long you’ve been in operation: be sure to save yourself some time by making sure you fit all of a grant’s eligibility criteria in this area before applying.

Is it worth obtaining a small business grant?

In our current climate, with the ‘survival mode’ small businesses are having to struggle through today, it’s been tough for businesses to make ends meet, let alone focus on growth and to be optimistic about finances. This makes the potential of obtaining a small business grant more important than ever before however, as it has the potential to bring a boost to your business.

For best results, you’ll need to dedicate time to researching the most fitting schemes, and prepare yourself for the application process.

Patience and perseverance is key, but the rewards are worth the effort!

Note: The information in this article is correct as of September 2023. If you have any more information about any of these grants or want us to include any we may have missed this year, please don’t hesitate to let us know. We want to keep this list as comprehensive and useful as possible!

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.
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