As a small business, finding the funds needed to start up and keep running during your first few years can be difficult. Taking out business loans and credit cards to stay afloat can be tempting. However, the business has to pay these back to the lender with interest, so you need to ensure you have the income to manage the repayments. This is where small business grants come into play. As long as your business meets the criteria, you can access funding without the need to make repayments.
Grants for new businesses can help with anything from saving money on premises to buying equipment and hiring staff. However, grant applications can be complex and only businesses that meet the criteria will be considered for the grant. To help improve your chances of being accepted for a grant, we’ve put this guide together, explaining some ways you can improve your chances of being accepted for grant funding.
Direct grants give money directly to businesses that apply for them, typically for funding a specific project. While these may seem like a good way to raise funds for your business, there are two main points you have to consider:
- There are typically stipulations that the business will need to match fund. Meaning that if your business needs £10,000 for a project, you will need to find £5,000 from other sources, and the grant provider will then give you the additional £5,000 to give the total value of £10,000.
- There may be restrictions on the use of the fund. For example, if your business has stated the funds will be used to buy new equipment, you may need to prove you have bought and are using the equipment, rather than having the funds sat in the bank to ease cash flow.
The simple answer is yes. However, these grants are sometimes very specific in their use and may vary by location. For example, there is currently a scheme in place to support scientists and business specialists developing biorenewables in Yorkshire. For a list of all the schemes currently available, check the GOV.UK website.
There are no guarantees you’ll be able granted the funding you’re applying for, but there are a few tips you can use to improve your chances.
- Talk to the grant body - while they won’t give you a decision before you apply, you can ask them whether there is anything you can do to improve your chances.
- Read the grant objectives - if the grant objectives are to reduce unemployment in a particular location, focus your application on how you’ll be able to hire more staff from the specific location and how your business will meet the objectives. The tighter the focus you have on the objectives, the greater your chances of success will be.
- Polish your business plan - to be successful, your business plan needs to not just be good; it needs to be great. If your business plan can get investors excited about the business, you’re more likely to be awarded the grant.
- Focus on the grant use - not just how the grant money will be spent, but how you will use it. For example, if you’re applying for a grant to buy new IT equipment, don’t just focus on what you will buy, but on how you will use the equipment and the improvement it will make to your business. Think of it this way; your business wants brand-new, top-of-the-line equipment, you need to justify how this equipment would be better than lower-end equipment and the improvement it would make to your workflow.
- Check your available funding - if you’re applying for match funding, make sure you have enough funds available to match what you’re applying for.
- Apply early - some funding pots only have a limited pot of money they can award, and as time goes on, the amount they’re willing to award for single projects starts to decrease. The earlier you apply for the grant, the more likely you are to receive what you’re looking for.