How to apply for small business grants in the UK

The difference between a grant and a loanFinding small business grants in the UK can require an extremely large amount of research, with eligibility depending on a wide range of factors, but that doesn’t mean it’s impossible to find sources of small business funding you don’t have to pay back.

Here’s a list we have compiled to help take some of the initial research effort out of applying for a grant.

The difference between a grant and a loan

A small business loan is money for your business you’ll have to pay back within an agreed timescale. This is different the biggest difference to a small business grant, as in the case of acclaiming one of those, you would not be expected to make any repayments.

Some grants will be offered on the basis that you must also invest the equivalent amount in your business. For example, if you’re given a £8,000 grant, you’ll need to have £8,000 to invest too.

This is the reason you should consider the terms and conditions of any kind of funding you apply for, you need to know the ins and outs of what you’re signing yourself up for. Always be sure to take careful consideration, ensuring you don’t land yourself in any financial trouble in these kind of situations.

Grants come in all different shapes and sizes but also come with terms attached, so there are a number of advantages and disadvantages with business grants.

Small business start-up grants

A range of start-up business grants are available depending on the sector you want to go into. For example:

The Lottery Heritage Fund supports heritage projects ranging from designed landscapes to cultural traditions.

Innovate UK provides government grants to “develop and realise the potential of new ideas, including those from the UK’s world-class research base”.

Research and Development tax reliefs support companies seeking to research or develop an advancement in their field (even if the project is unsuccessful).

You can also enquire with your local authority about grants available in your region and funding specific to your industry. The government’s business finance finder and regional funding portals mentioned below are a good place to start your search for this type of business grant.

Small business grants for young people

The Prince’s Trust supports young people aged 18 to 30 that are running their own business. They do however provide training and mentoring as well as funding and resources.

In response to the Covid-19 pandemic, they’re going the extra mile to support young business owners. Working alongside NatWest, they’ve managed to set up a £5 million Enterprise Relief Fund, offering grants to self-employed people and business owners aged between 18 and 30 in the UK.

As well as the financial support, recipients of the grants will also get one-to-one business support and guidance.

To be eligible, you need to have set up your business within the last four years and not have any other source of income during the pandemic. This is to iron out others and get to the people that really need this extra financial aid the most.

Discover more about them and how you can register your interest in their offerings at the Prince’s Trust website.

New Enterprise Allowance

The New Enterprise Allowance gives you mentoring and an allowance if you want to start, or develop, a business. To be eligible, you’ll need to be over 18 and either:

  • receive Universal Credit, Job Seeker’s Allowance or Employment and Support Allowance
  • be a lone parent, sick or disabled and on Income Support

Your mentor will need to view and approve your business plan. After that, you may get a grant of up to £1,274 over a 26-week period. Though in most cases the amount will be lower, every little helps, especially during these uncertain times.

Grants for taking on an apprentice

You can now get financial support directly from the government if you’re taking on an apprentice at your business.

If your pay bill is less than £3 million a year, you won’t pay the apprenticeship levy. This means you get five per cent towards the cost of training and assessment for your apprentice, if the apprenticeship started on or after 1 April 2019.

The government pays their 95 per cent share directly to the training organisation. You also pay your share directly, according to a payment schedule you agree with the training organisation.

Use the government’s enquiry form to ask the National Apprenticeship Service about the funding available.

Where can I find small business grants in the UK?

Finding financial help for your small business can depend on so many different factors, such as where your company is located, how big it is, how many people work there, how successful it is, etc.

You can use the government’s Finance and support for your business online tool by selecting the ‘grants’ tick box. You can also filter by how long you’ve been trading (useful if you’re only looking for start-up business grants), industry, number of employees, and region of the UK.

Small business grants in England

The Local Enterprise Partnerships (LEP) Network website lists the 38 regional Growth Hubs. They’ve been organised to help people by providing business funding, support and guidance in their local areas.

They attempt to make it easier for business owners to find the financial support they need, by bringing together all of the available national and local business support in one easy to locate area.

You can search for business support available in your local area on the LEP Network website.

Small business grants in Northern Ireland

The Established SMEs Funding section of Enterprise Ireland lists several ways you can get financial help for your small business if it’s already up and running and you’re based in Northern Ireland.

It also offers High Potential Start-up Finding if your business idea has “the potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in sales within 3 years of starting up.”

Small business grants in Wales

If you have a small business in Wales, you can use the Welsh government’s Funding Locator to find and apply for a variety of grants. Methods of searching include:

  • the Welsh Government
  • the UK Government
  • local authorities
  • charitable organisations

Read more: Bank turned down your small business loan?

Business Finance specialist at Invoice funding | + posts

Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.

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