If your startup is based in the United Kingdom, where can you go for funding? Join us as we look at startup and small business grants in the UK, including how to get government grants for new business startups
Unless you’re planning to bootstrap your startup idea yourself, you’re going to need funding for your business. After all, you need money to pay for development, staff, marketing, and stock!
You can get funding one of two ways: either by finding an investor, or by applying for a grant, either from the government, a charity, or a third-party provider. Different countries (and even different regions) have different grants available. In this article, we’re going to look at how to get startup fundraising in the UK.
(And by the UK, we mean England, Wales, Scotland, and Northern Ireland.)
So, what small business startup grants can you get if you operate in the UK? In this article, we’ll look at some of the options available and how you can apply.
- The benefits of applying for a startup grant in the UK;
- Will UK grants and funding be affected by Brexit?
- What do you need to apply for a startup grant in the UK?
- Charity-based grants in the UK;
- Small business grants in the UK;
- Community-based grants in the UK;
- Education-based grants in the UK;
- Other startup grants in the UK;
- In summary: Getting a grant can mean you get ahead!
The benefits of applying for a startup grant in the UK
There are a range of benefits to getting a startup grant if you’re a business in the UK. The first, and most important is that you don’t have to pay the grant back or give away equity in exchange. This means you get the money and keep control of your startup.
The second is that some funding providers will also offer help and support to your business, and may even give you free publicity and promotion. This can help give your startup the edge in a competitive marketplace.
Finally, there are lots of different options for startup fundraising available. This means that no matter the size of your business, the industry you’re in, or the amount of money you need, there’s the perfect small business startup grant for you. We’ll look at some of the startup funding grants available later on in this article.
Will UK grants and funding be affected by Brexit?
In the past, a lot of UK government funding for small businesses was provided by the EU. However, now that Brexit has taken place, UK-based startups may be concerned that some funding is no longer available.
While some funding has been discontinued, the good news is that there is still plenty of grants to be had. The UK Government is working with the EU to keep as many grants open as possible.
What do you need to apply for a startup grant in the UK?
Different grant providers may ask for different things, so it’s essential to read the terms and conditions thoroughly before you apply. Not having the correct information to hand may delay your application, and with many startup grants, time is of the essence.
The majority of startup fundraising grants will ask for a business plan. This is so the grant givers can see what your startup does, the market research you’ve done, the people involved in the business, and what you want to achieve. If you’ve started trading, you may also be asked to provide financial information or a startup valuation.
Some grants specify that you can only spend the funding on certain things, such as machinery, office furniture, marketing, or training. It may be that rather than being given the startup funding in one go, you have to submit receipts on a regular basis to receive the money.
Some startup grants may offer what is known as ‘matched funding.’ This is when you are asked to top up what is being offered to make up the final amount. For example, a grant provider may provide 70% of the funding cost, and you will be asked to contribute the other 30%. If you do apply for this type of startup grant in the UK, you will need to prove you have the money in place beforehand.
Now, let’s look at some of the small business startup grants available in the UK.
1. Charity-based grants in the UK
Some charities in the UK offer funding opportunities. While most of these grants are geared towards businesses and charities operating in the voluntary sector, some are directed towards startups.
The Prince’s Trust
The Prince’s Trust is a national charity that provides training and learning opportunities for young people. The charity also provides startup funding for 18 to 30-year-olds that want to start a business.
As well as funding, advice, and support to increase the chances of success, there are low-interest loans available too.
If you can’t get a grant, a loan from a grant provider may be the next best thing. This is because the repayments and interest fees will be very low, the barriers to entry aren’t as high as, for example, obtaining a bank loan, and you’ll still maintain ownership of your business.
2. Small business grants in the UK
If you’re looking for a grant for your startup, there are a range of small business grants available. Some of these grants are allocated depending on where you are in the UK, which we’ll look at in more detail in the next section. Here are some more general small business grants you may find across the UK.
Scottish Edge is a funding competition that offers grants to early-stage businesses in Scotland. There are a wide range of competitions available, including for young people under the age of 30 and pre-trading companies. The next round of funding opens in January 2023.
Gigabit Broadband Voucher Scheme
Earlier on, we mentioned that some UK funding schemes are to be spent on specific things. This grant is for small UK businesses in rural areas that want to invest in faster broadband.
You may need to team up with other businesses in the area to be eligible for the funding.
If you’re looking for EV charging points, the UK government also offers a similar scheme that subsidizes the cost.
Barriers To Startup grant/Young Person’s Startup grant
This government startup business grant is for people in Wales who want to start their own businesses.
To get the grant, you must be over 25 and either be unemployed or ‘economically inactive’. While the Barriers To Startup grant runs until March 2023, it will close earlier if all the funds are used up, so apply as soon as you can.
There is also a grant for young people under the age of 25 that want to become self-employed in Wales.
3. Community-based grants in the UK
Different regions and parts of the UK will have various grants in place. To be eligible for these grants, you will either need to be a resident of, or have a startup that operates in that area.
We recommend getting in touch with your local council’s business team, who will be able to let you know about the grants available and how to apply. Alternatively, you can see some more of the local grants available on the gov.uk website.
Invest To Grow
This programme provides a mixture of grants and loans to private-sector businesses across the East Midlands. It’s aimed at businesses that want to create new jobs and boost company performance.
The Ad:Venture program is for businesses in the Leeds and West Yorkshire area that are looking for support, development and growth grants.
Business Gateway Grant
Intended for businesses in Leicester or Leicestershire, this grant is open to B2B businesses that have been trading for a minimum of 12 months. This grant is matched funding, so while the grant offers 35% of the project costs, you will need to fund the rest.
The Growth Fund
Aimed at businesses in the North East of England, this grant offers 30% of expenditure for SMEs. Some sectors and projects aren’t eligible for funding, so be sure to read the guidelines before applying (this applies to all grant funding initiatives too!).
4. Education-based grants in the UK
Some startup funding is open to students and recent graduates. Here are just some of the grants we’re aware of, but it’s definitely worth checking with your local educational establishment to see what’s on offer.
Be Inspired At Staffordshire University
This grant offers financial support and mentorship to startups that want to start a business in the Staffordshire area. To be eligible, you must be a graduate of a UK university. While the 2022 deadline has now passed, you can still apply for future cohorts.
As an aside, many local councils offer grants to help startups relocate to their area in an attempt to grow the local economy. So if you’re already considering moving to a specific town or city, it may be worth speaking to the relevant local council to see if there is a scheme in place.
Santander Entrepreneurship Awards
The bank Santander offers university students that are launching startups the chance to win funding through its entrepreneurship awards. There is funding for both new and growing businesses.
While applications for 2022 have now closed, the awards will reopen in 2023.
The Mayor’s Entrepreneur Programme
5. Other startup grants in the UK
The great thing about grant funding in the UK is that there is money available for a wide range of different startups. Here are some of the grants you might not have been aware of.
Innovate UK is a government initiative that offers to fund research-based startups and small businesses. Relevant organizations are encouraged to apply for a share of funding to carry out relevant projects.
While this is more for startups in the niche science and technology industries, it can be a great way of getting a sizeable grant.
SMART: SCOTLAND grant
Like the Innovate UK funding, SMART: SCOTLAND helps fund businesses that focus on technological innovations and gives them the money to conduct feasibility studies.
To be eligible, you must be based (or planning to set up) in Scotland, and own all the intellectual property associated with the project.
In summary: Getting a grant can mean you get ahead!
We hope you’ve found this article about small business startup grants in the UK insightful. There is a lot of money out there up for grabs; it’s just a question of finding out where (and how!) to get it.
Not in the UK, but want to know about funding in your country? Don’t fret. We’ll be looking at grants in Europe, Canada, and the US in future articles. So keep reading our blog to check out the rest of our articles, or alternatively, follow us on Twitter, Facebook, or LinkedIn.
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Important note: The information in this article was accurate as of November 2022. Grants and the criteria required to attain them change on a regular basis, so please be sure to do your research before applying!