How to find business grants for growth

Millions are given to businesses each year in the form of government grants. Is your business eligible?

Every year the government ploughs millions into growing businesses through non-repayable grants. Isn’t it time you took a slice of the action?

Howard Nimmo and Mark Page, founders of Pulse Generators, were two men with an idea. Page had designed a tidal power generator that, unlike other devices of its type, could operate in shallow water. Nimmo had joined him to provide the business acumen for the project, which would culminate in devices being connected to the national grid.

However, ideas such as theirs require rigorous research and development. This meant they needed funding, but because the technology was so far away from the market, the private sector was reluctant to back it. “If we hadn’t got support from government, then it would have been very difficult,” admits Nimmo.

Following a series of grants, which took the project through those early trial stages, the company has recently closed a £580,000 funding round, and has drawn on investment from the early-stage investor The Viking Fund, Japanese investor Marubeni and the LIFE business accelerator. Now, after four years, it will soon be ready to add one of its devices to the national grid.

If you are in a similar situation to Pulse, or if you think your idea could be of great benefit to your region, then you should consider looking for grants. There are about 2,500 supporting schemes for companies in the UK.

Government (central, local or the European Union) ploughs millions into businesses every year. Manufacturing industries and new innovations are among the biggest recipients, but they’re not the whole story. The Regional Development Agencies (RDAs) are all interested in suitable companies to offer money to, but each one operates independently, so there is something of a postcode lottery involved here.

The fastest way to find out what’s available is to visit the Business Link website (www.businesslink.gov.uk/bdotg/action/gsd) and fill in a short questionnaire. This will generate results for your area and industry, so you’ll know where to start applying. Business Link also provides advisers that will visit your company for free and offer advice on ways you can improve your business through funding.

Applying

It is impossible to detail all the schemes here, but there are some basic rules of thumb when applying:

… Don’t expect to get hold of taxpayers’ money that easily and find out the criteria for each

… Applying can be time consuming – it can take up to two months to find out if you are eligible and then as many as four to get the final decision

… You need to provide full information on your business, idea and plan, including projections – they are looking for feasible projects not charity cases

… They are usually paid to companies that need them, so if it is clear that the project won’t occur without it, then a grant is more likely – however, you are often expected to match what they are offering and you will normally get an instalment after an agreed milestone has been reached

… The amount available varies dramatically depending on region.

Location, location

Businesses in economically deprived areas or in the UK regions are best placed to take advantage of grants. Evan Rudowski set-up his website provider business SubHub in

Cardiff in order to take advantage of the grants there. The firm has received a £240,000 Regional Support Award (RSA) for moving into the area and giving up its plan to start-up in the US. “We told the Welsh Assembly that we wouldn’t be able to justify setting up there unless we got the grant, because it was easier for us to go to Florida,” Rudowski says.

SubHub has also gained £15,000 through a SMART award for the development of its web platform, as well as similar amounts through a marketing grant and a specialist support grant. Finally, the company is making use of the incubator facilities of the @Wales Digital Media Initiative. “We wouldn’t have been able to get where we are without this support,” adds Rudowski, “we would have needed external investment.”

RSAs are also available in Scotland, but in England the closest comparable scheme is the Selective Finance in England (SFIE) grant. These are awarded by the Regional Development Agencies (RDAs) of which there are nine. Within the RDAs, places are given a classification of Tier 1, 2 or 3 – Tier 1 can access the biggest grants, Tier 3 the smallest. Most areas are rated to at least a Tier 3, with the exception of parts of Yorkshire and the South East RDAs. Fortunately, this is just one grant out of many, and for awards such as the Grant for Research and Development (GRAND) there is no location issue. However, as a general rule companies in the regions get far more grants.

Getting help

The grants are literally gold dust to some, so it’s little wonder that many companies employ consultants to help secure them. They will prepare your application for a percentage of the award, a fee or a mixture of both. Unfortunately, there is no approved list of consultants, although there is a register. But, as with all things, track record, experience and recommendation are the best ways to choose which one you use.

UK Grants has helped businesses gain SFIE and GRAND since 1991. The company helps about 15 to 20 businesses each year. However, founder Patrick Heywood says that he turns the majority of applicants away as he knows they aren’t eligible. “Because we filter the clients before we apply to the RDAs on their behalf, we have about a 90% success rate,” he says. This is far above the average, which for GRAND awards, is closer to 50%.

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