Grants come in all shapes and sizes and can be especially beneficial to small businesses or start-ups. Not only can a grant help you save money, lower costs and help grow your business, grants are often non-returnable or come in the form of a soft loan with low interest rates, or are interest-free.
Other types of grant offer cheap or free business equipment, or subsidised training for staff. There are an estimated 200 government grants alone for small businesses in the UK, each one with its own requirements and criteria for applying.
Securing a grant can be complex and time-consuming, so what is the best way to go about it, what are some common pitfalls to avoid, and where do you find one that’s right for your business?
New grants appear on a regular basis so it’s important to keep up to date with what’s available. For government grants or financial support, click here and search regularly online for grants relative to your business. The Prince’s Trust offers grants to young entrepreneurs for example, but there are many other sources out there. You can also use a screening service who will refine your search for a business grant based on your details, although most will charge a fee for this service.
Get in early
The sooner you can apply for a particular grant the better, ideally when the scheme is launched and still has the most funds available. This reinforces the point above about keeping your eyes open to what grants are available and getting in before the competition.
Grasp the objectives of the grant
Make sure you take time to understand what the grant is for and what it hopes to achieve. For example, is the grant to help you take on more staff or offer a service that is of benefit to the community? If you decide to go ahead, it’s important you show how these objectives relate to your business aims or project.
Contact the awarding body before applying
A quick call to the award body will not only help clarify whether or not you meet the criteria for applying, you can also try to make a personal contact. Administrators are usually keen to claim success for their grant scheme and having a name can definitely help with the process going forward – so get on first name terms if possible!
Don’t press ‘go’ before applying
If you’re looking for a grant for a specific project, don’t start the project before asking for the funds. If you do go ahead, this may suggest you already have all the money you need to finance the project.
Have a strong business plan
Administrators for awards bodies will expect you to present a professional business plan when you apply for a grant. If you’ve already started trading, be prepared to make your balance sheet available and provide details about turnover etc. Make sure your business plan is up to date and don’t simply recycle the one you used when first applying for bank finance.
Instead of just saying the grant will help you grow your business, be specific about how the money will be used. If it’s to fund new equipment, take on new staff or launch a new product, be sure to give exact details and remember to emphasise the benefits any such investment will bring, including how this may benefit the wider community at large.
State the importance of the grant
Leave the award body in no doubt that the grant is crucial to your project and will have a far greater chance of succeeding with their financial support.
But don’t overstate your case…
Don’t be tempted to overstate what the grant can help the business achieve. Be honest about what your aims are and realistic about the benefits of the project without exaggerating or bending the truth.
While some bodies may provide 100% non-returnable grants, the majority of award bodies expect to match the amount of money you’re able and willing to invest in the project. So, if you’re looking for a £5,000 grant, for example, make sure you have the matching funds in place before applying.