Everything you need to know when considering applying for a small business grant
As a start-up, the biggest challenge comes in finding the capital to get started. You may be aware that the UK government has been steadily improving the grants available, both to get your business going, and to lessen the risk by providing substantial payouts to entrepreneurs forced to sell their companies.
However, navigating the vast terrain of the various options is tricky. There are many factors you’ll need to take into account before starting – from who can apply for a business grant, to how it works, to the risks and downsides involved. We’ve put together a handy guide to get you started in finding and securing the perfect grant for your business.
How does a government grant work?
A grant is an amount of money paid by the government to help new businesses and entrepreneurs. The capital for grants is sourced from an amount set aside from taxpayers’ money, meaning this is not a loan.
In other words, you don’t have to pay it back. However, this also means that there is a lot of competition for these grants, and your application has to stand out in order to secure funding.
Although you don’t have to pay the grant back, you’ll almost certainly have to put in a significant amount of capital, as grants rarely pay the entire cost of a startup business.
How to improve your chances of getting a business grant
As mentioned, there is strong competition for the grants available. You have to ensure that your application is strong before submitting it for funding. Phil Mitchell provides what he calls the RAPP process:
Research which grants are available using the grant finder.
Applicant suitability. While it’s tempting to apply to as many grants as possible, this is likely to decrease your chances. The application process is time-consuming and can be exhausting. Applying to too many will simply increase the number of rejection letters and cause carelessness when it comes to those that matter.
Preparation/professional. Prepare and tailor your application carefully to meet all the criteria. It may be best to hire a professional. The cost involved is well worth it, as a professional knows best how to increase your chances of success.
Patience. A caveat to all the other points. Take time on your application, while meeting deadlines, and don’t expect immediate success.
You can find a further 10 tips here, which will help you when it comes to the nitty gritty.
How long does the process take?
After your application, the processing time will depend on the nature of the grant for which you’ve applied. The more local your grant is, the quicker you’ll get an answer, and the money if successful. National grants involve a huge amount of bureaucracy, and can take months.
Downsides of a business grant
The government information website lists the following disadvantages of a grant:
- difficulty in finding the perfect fit
- there is a lot of competition
- they’ll only cover a portion – you’ll be expected to match the funds you’re awarded
- although there are grants specifically for businesses that have already been started, most grants are awarded to business proposals
- the process is time-consuming
Get started now
By now you should have an idea of where to get started. The most important starting point is in doing extensive research before actually beginning the application process.
Use the government’s grant finder to determine which grants apply to your business, and find out everything you can about those grants, while keeping in mind the points listed above.