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11 Min. Read

What Small Business Grants Are Available in the UK?

small business grants uk

More than 200 government grants are available to help small businesses in the UK. Obviously, this is brilliant news!

Finding a small business grant that matches your needs is a bit of a treasure hunt. The prospect of unearthing that sparkly grant that’s perfect for your small business is very exciting. You’ll need to invest some research time and be prepared to think creatively.

So let’s find out exactly what a small business grant is, and where you might find one that’s right for your business.

Here’s What We’ll Cover:

What’s the Difference Between a Small Business Grant and a Small Business Loan in the UK?

Are There Any Downsides to Applying for a Small Business Grant in the UK?

What Small Business Grants Are There for Young People?

Are There Any Start-up Business Grants for Small Businesses in the UK?

Where Do I Find All These Amazing Small Business Grants?

How Do I Apply for Small Business Grants in the UK?

What’s the Difference Between a Small Business Grant and a Small Business Loan in the UK?

A small business loan, even one designed for start-ups, must be repaid in full. Your lender gives you the up-front lump sum and you repay in installments. This is usually a monthly payment, with penalties written in if you deviate from the pre-arranged schedule. Usually, you’ll also pay interest on top of the initial loan amount.

A small business grant does not come with any expectation of being repaid. There are eligibility criteria that are specific to each small business grant. For example, you have to invest the same amount as the grant award. So if you are given a £5,000 grant, you must also put in £5,000.

Or the grant may be specific to businesses in a certain industry or at a certain point, like a start-up business. Some small business grants designate what the grant money is to be spent on, like IT equipment.

That’s the main benefit of getting small business grant funding, rather than a business loan. It’s easy to see why they are so popular with the business community. Not only that, you don’t lose any business equity to outside investors.

There are small business grants available from the private sector, as well as government grant funding. Despite the specific nature of small business grants from both sectors, there are some overarching similarities.

Sometimes they are part of investment in revitalising a particular area. Often they have a focus on innovation. And they all usually have the underlying aim of boosting the national economy.

Small business grants don’t always award a cash sum. They may give vouchers instead, which can help businesses get money off essentials.  

Are There Any Downsides to Applying for a Small Business Grant in the UK?

This is a very important question to ask before you start looking for a small business grant. It’s generally accepted that the actual grant application process is the worst thing you have to tackle. You need to find a grant that’s applicable to your small business, figure out its particular quirks, and meet all the administrative expectations.

Finding funding is time-consuming. That’s what puts lots of small businesses off. You may hear about a grant that’s perfect for you, but if you can’t make time to go through the paperwork details, it may as well not exist.

We know that no one running a successful small business has hours to spend searching online. But we all know, you have to spend time digging the hole in order to reach the treasure chest.

Unfortunately, this means that lots of businesses miss out on grant money they could have applied for. It’s a great cash boost that you never have to give back and really worth considering.

As an established small business enterprise, you’ll need to look at your financial position holistically and make sure that any grant funding doesn’t interact negatively with its other elements. As it stands, there are more small business grants for start-up businesses than for a small- or medium-sized enterprise.

It’s also important to point out that any business grants and funding opportunities are extremely competitive. Whatever you apply to, despite the hassle of the application procedure, you will be up against a number of other businesses competing over the same business grant.

What Small Business Grants Are There for Young People?

Some grants are specifically designed with young people in mind. For example, the Prince’s Trust Enterprise scheme helps 18-30 year olds take their great idea and turn it into a business.

There is a whole programme of business mentorship, and the opportunity to apply for a cash grant to help with start-up costs. Typically, the amount of grant funding has been a maximum of £3,000. The Prince’s Trust has a proven track record, and 86,000 young people have been helped by their Enterprise scheme so far.

This is only one example of the sort of financial support you can apply for as a young person with an idea for a small business. There are so many others. The size of the grant awarded by the Prince’s Trust is typical of other grants in the same category. Secondary schools, colleges and universities across the UK are all good sources of information about what’s available in your area.

Are There Any Start-up Business Grants for Small Businesses in the UK?

Absolutely—there are a whole range of start up business grants you can apply to. In fact, most of the grants for small businesses are aimed at new businesses.

In many ways, this can make for quite an overwhelming process for a new business owner. You can narrow it down a bit by the industry sector you’re in.

For example, the National Lottery provides grants through the National Lottery Heritage Fund. These fund different types of projects connected to the UK landscape and natural heritage. One such programme is the Local Places for Nature grant which is “for capital projects in Wales that will acquire, restore and enhance nature.”

This is location-specific, as grants are only for projects in Wales. And they are worth between £10,000 and £50,000. For a small start-up business, that’s an amazing amount of funding to support your launch.

Another example is the government’s new enterprise allowance. This is a weekly of £1,274 over 26 weeks for people over 18 years old. You must fit one of two criteria:

  • You receive income support and are disabled, sick or a single parent
  • You (or your partner) receive employment and support allowance, jobseekers’ allowance or universal credit

Along with this government grant, you also get a business mentor to help you get back into work by developing your own small business.

See how varied small business start up grants can be? Use the information listed below to find the best fit for your new business.

Where Do I Find All These Amazing Small Business Grants?

The best question of them all: Where’s the small business grant that’s going to help grow your business?

UK small business grants and funding can be found by looking geographically. You can search UK-wide using GOV.UK’s ‘Finance and support for your business‘ page. This lists all the different financial support available across the UK for new businesses and small- and medium-sized businesses. This includes business start-up grants, government grants, and other financial support to help you to grow your business.

Here you can click ‘grant’ as the type of support you’re looking for. And then narrow down your search further by choosing what stage your business is at. This is really handy if you’re looking for a start-up business grant. You then have the option to select your industry, regions and the number of employees you have in your business.

These are all common eligibility criteria in business grant applications. It’s such a great time-saver, definitely worth being your first port of call when you go on your hunt for the best grants available to your business.

So that’s the national picture—let’s break it down further.

Local Enterprise Partnerships in England

Local Enterprise Partnerships (LEPs) are business “growth hubs” in England. There are 38 in total, and are designed to provide business support and help on a local scale. They are a partnership between your local authority and the private sector. If you live in England, find your local LEP and ask them to help you find local grants available to your small business.

Small Business Grants Available in Scotland

The Scottish Government has a very well organised list of the grants available exclusively in Scotland. The range of government grants available for small businesses is quite extensive.

Scottish government grants are available in a variety of industries, but they are all usually determined by three main drivers.

You have a small business that:

  • Will bring social or economic benefits, for example creating jobs
  • Works on collaborative projects leading to new technology or ideas
  • Focuses on research and development

You need to keep these overarching aims in mind when you apply for grants in Scotland.

Welsh Finance Locator

The Welsh Government has a free tool called a Finance Locator which helps people find business start-up grants, small business grants and other financial support. It asks users to enter:

  • Business structure
  • Business type
  • How many employees you have
  • How established your business is
  • Business location (region of Wales)
  • What you plan to use the money for

All are drop-down, multi-choice menus to make it easier. You are then presented with a list of finance options at a local, regional and national level. This isn’t just grants though—loans and other options are included.

What About Support For Small Businesses in Northern Ireland?

Enterprise Ireland explains what grants are available for start-ups and established businesses in Northern Ireland.

Small and medium sized businesses in Northern Ireland can apply for grants that match Enterprise Ireland’s main funding requirements. They look at:

  • If the company has received business support from them before
  • What region the business is based in
  • How much the project needs the grants available
  • The potential of the project to encourage job creation and sales growth

Start-ups in Northern Ireland might also be eligible for its High Potential Start-Up (HPSU) Companies support. This is funding for new businesses that have “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 three years of starting up.” Wow, how exciting!

How Do I Apply for Small Business Grants in the UK?

Whether you’re a new business or have been up and running for a decade, you need to treat each business grant application with care. The application process will vary, depending on the particulars of each grant.

But we’ve got some helpful FreshBooks tips for you, which apply across the board.

Pay Attention to the Objectives of the Grant

Really consider what their aims are. Maybe even phone and have a chat to glean more understanding. This money is being given to you for free, but the providers aren’t just there to help UK businesses. They want to see action.

That might mean new products, or research and development in a particular area. Whatever the grant’s objectives are must become your focus for your grant application. Demonstrate you understand them by how you word your pitch.

Show How the Money Will Be Used

Explain exactly what you’re going to do with the money you’ve been awarded and answer that very useful ‘So what?’ question. For example, You own a lovely bakery that mainly uses local produce. You’re going to open additional premises in a neighbouring village with the grant money. So what?

You’ll grow your business, support other local businesses further and employ local villagers. And that’s just the start. Really spell it all out. Show that you’ve thought about your own business, but also about how it’s benefiting others—either in a business or community sense. Refer back to the original aims of the grant fund itself.

Your Business Plan and Funding

You’ll be expected to include a top-notch business plan with your application. That includes start-up costs, cash flow, and any funding requirements connected to the grant’s eligibility criteria. At least this bit won’t be tricky with FreshBooks’ financial reports and balance sheet ready and waiting for your click.

Don’t Hang About!

The earlier you get your small business grant application in, the more likely you are to be successful. Although they may have a deadline, they don’t wait until then to start allocating the money. Most say they will close applications early, if the pot is empty.

Also, the longer grant funding is available, the more other businesses will hear about it and become your competition. So if you find a diamond of a grant that’s going to help your business, get that application done as soon as you can.

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