Small business grants – are you eligible for one?

Small business grants – are you eligible for one?


As a small business owner, getting any sort of grant is definitely advantageous and exciting and can really help boost your business. It can help you buy the equipment you’ve been needing, renovate your premises, or simply assist in paying your employees. Unlike loans, small business grants do not need to be paid back, although there may be some obligations surrounding how you spend the money.

Small business grants are usually funded by the private sector or the government. In most cases, these grants are designed to resolve a specific issue that your business may be facing, and help revitalise small businesses in the UK.

Many small business owners may be deterred by looking into grants as there is usually quite a tedious admin process involved with applying. But if you know you are eligible for a certain grant, it is well worth applying for it as it could give your business the advantage that it really needs.

In this article, we discuss some of the small business grants that you may be eligible for, and provide some tips for when you decide to apply.

What is a small business grant?

Small business grants come in a wide variety of different forms. But basically, small business grants are sums of money granted to small businesses, usually for specific purposes. These grants are funded by either the government or the private sector.

The types of small business grants include the following:

Equity finance

Equity finance grants are very sought after as they offer new businesses reductions when it comes to their investments and income tax. Your business may be eligible if it’s under two years old and has fewer than 25 employees.

Direct grants

Direct grants are especially advantageous to brand new businesses as these grants are designed to cover some of the essential start-up costs, such as buying equipment, investing in the proper staff training, and sales and marketing.

Soft loan

Soft loans also tend to fall into the grant category because even though that need to be paid back, the terms and conditions of the repayment are a lot more generous and ‘soft’ than traditional loans.

The major difference between grants and loans is that loans need to be paid back while grants do not. When you take out a loan, you may have slightly more freedom to do what you want with the money than you would with a loan.

Some of the different small business grants available in the UK: are you eligible?

Are you a small business owner in the UK? Are you interested in the different options that are available to you in terms of small business grants?

Below are some of the current small business grants available in the UK.

COVID-19 Support

COVID-19 put many small businesses in truly unprecedented circumstances, and many businesses were left with not enough money to pay employees and keep things going. The UK government put together a package of relief measures that have aimed to assist businesses that have been affected by COVID-19.

While, in many ways, the pandemic is somewhat behind us, many businesses are still affected, and that is why many of these relief measures and schemes are still in place.

One of the most successful schemes is the Coronavirus Job Retention Scheme. This scheme may be available to you if you are worried about having to lay off your employees as a result of the pandemic. This scheme allows you to continue paying employee salaries.

These workers will become ‘furlough’ workers, which means that they’ll need to take a leave of absence. If you qualify for this scheme, the HMRC will pay 80% of furloughed workers wages, up to  £2,500 per month.

Another relief program is related to Statutory Sick Pay (SSP). You may qualify for this if you have had to pay any of your staff sick pay because of COVID-19. This new legislation allows business owners to reclaim up to two weeks of SSP, so long as an isolation note is provided from NHS 11.

The Coronavirus Business Interruption Loan Scheme (CBILS) has also been put in place to support small businesses with short-term cash flow from trusted lenders. You may be able to access up to £5m. Any UK business may be eligible for this scheme, with the only requirement being that their annual turnover is less than £45 million.

Bounce Back Loans

The Bounce Back Loan scheme aims at assisting both small and medium businesses in the UK borrow up to 25% of their turnover (capped at £50,000) to help them through difficult times. The government guarantees 100% of the loan so that there is no interest or fees for the first year of the loan. Almost any business in the UK can apply for a Bounce Back Loan, so long as you are not a state-funded school, bank, or insurer.

Gigabit Broadband Voucher Scheme

The Gigabit Broadband Voucher Scheme (GBVS) is a government grant supplied by the UK government. It aims to help rural businesses across the UK get much-needed access to high-speed internet in the form of broadband connections.

You may be eligible for this grant if you operate your business from an area where the broadband speed is 100Mbps or less. To qualify, there should also be no official plans in place for network improvement in your area.

High-speed internet can really help many processes for your business become far more convenient, so this one is definitely worth looking into if you qualify!

Gov Apprenticeship Scheme

Is your business one that may benefit from hiring an apprentice? Employing an apprentice can be a truly fulfilling experience as you have the opportunity to teach someone all the skills involved in your craft or trade.

Fortunately, the UK government has multiple grants in place to encourage you to employ an apprentice and expand your business. You are able to claim as much as £4k from the government when you hire an apprentice.

Almost any type of apprenticeship is eligible for this type of funding.

The Prince’s Trust Enterprise program

This is one of the most sought after avenues of assistance for small businesses. It offers development awards aimed at helping young entrepreneurs get their businesses off the ground, and the type of assistance that is mostly offered is training courses.

In order to be eligible for this program, you need to be between the ages of 16 and 30 and live in the UK. You’ll also need to be studying less than 14 hours per week if you are currently being educated. If you are employed, you’ll need to work less than 16 hours a week.

The type of support you can get from this program includes course fees, equipment, tools, job licenses, and transport to your new job.

Capital schemes

In the UK, there are four different types of capital schemes aimed to assist small business owners in raising money by offering them forms of tax relief. The four different types include:

  • Enterprise Investment Scheme (EIS)- This scheme offers tax relief to new investors who want to invest in your company. You’re able to raise up to £5 million per year with this scheme. You must have no more than 250 employees to be eligible for this scheme.
  • Seed Enterprise Investment Scheme (SEIS)-  Like EIS, SEIS also helps you raise funds for your business by offering a series of tax reliefs to potential investors. The major difference is that SEIS is geared more towards small businesses as the maximum employee number for this scheme is 25.
  • Social Investment Tax Relief (SITR)- This scheme is very similar to both EIS and SEIS, but is aimed at specifically helping social enterprises gain capital through investments.
  • Venture Capital Trust (VCT)- This scheme allows businesses to gain capital through long-term investments, in which the investors are offered significant forms of tax relief.

Rates relief

Rates relief can help reduce the impact of your monthly expenses on your business’s profit and cash flow. The government has implemented a rates relief scheme for businesses with a rateable value of less than £15,000.

Keep in mind that these are definitely not the only grants available to you. Most of the grants we have covered in this article are government-backed grants. There are hundreds of grants available in the UK, and it is all about finding the one which is right for you. If you want to find more loans that you may be eligible for, do some research or speak to a professional financial advisor that will be able to point you in the right direction.

Tips for applying for a grant in the UK

Whether you are a brand new business or a small business that has been around for several years, you need to pay close attention when applying for a small business grant. While the application process differs from grant to grant, here are a few things that you should keep in mind:

Do some research

Take care to research and speak to other business owners when trying to find out which grants are available to you. Without doing proper research, you may be missing out on grants that would be absolutely ideal for your business. Gather all of the grants you wish to apply for and do the entirety of the application processes together to save you time.

Look at the objectives of the grant

What is the grant hoping to achieve? Are you going to be able to help them achieve their objectives? And how?

If you don’t fully understand the purpose of the grant, you may want to call the providers or do further research. It is important to understand that grant providers are not doing this out of the kindness of their heart. They really want to see action.

In your pitch, show them that your business is the right choice to help them obtain their objectives and that you have a thorough understanding of what they are looking for in terms of an applicant and the applicant’s actions.

How will you use the money?

When applying for a grant of any kind, you should be able to pinpoint how you plan to use the money that the grant will provide you with should your application be successful.

Grant suppliers want to see that their grant money is going to good use. Draw up a detailed brief of where the money would go, in line with grant obligations, and how it would benefit your business as well as the local community and economy.

For example, show how you plan to employ further employees, upskill your current employees, support local suppliers, and become a respected business in your community.

Put in a copy of your business plan

When submitting your grant application, it is always a good idea to attach a detailed copy of your business plan. You may want to revise your business plan before simply attaching it. This way, the grant suppliers will easily be able to see if you are eligible for the grant. You’ll also want to attach recent financial reports and balance sheets.

Don’t wait until the last minute

Upon researching different grants, you’ll see that they all usually have deadlines. If you get your application in early, it will make a good impression, and you’ll probably have a better chance of being successful. This is because some grants start being handed before the deadline.

Small business grants offer you a world of benefits and ways for you to get ahead. While it can often be confusing with so many grants available, this also means that there is more than likely a grant that is perfect for your business and can fulfil your needs! No matter what type of small business you own, there is more than likely a grant out there that is right for you.


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