Startup business grants: Your guide to startup support
As a new business owner, you’ll find there are so many things to think about. Financing your business should be your top priority so it’s time to discover startup business grants which can really help your business soar
It is a stark fact that half of all small businesses fail within three years, according to a Financial Times survey of startups that began in 2013. As a startup business owner you’ll be under no illusion of the difficulty of the task ahead. Those who do manage to run a successful business in the long term succeed for many reasons. But, in the early years, a major factor is being able to find and take advantage of the support available to pioneering startup business owners.
The good news is there is plenty of support accessible to startups, from government grants, capital investment, mentorship and networking. If you are able to take advantage of all the startup business support out there, and have a solid business plan in place, there’s no reason why your business will not only survive, but go from strength to strength.
What type of startup business grants are available?
Let’s start with the important stuff, the lifeblood of any business, the dough, the dosh, the wonga, the cash.
There are various types of grants available to small businesses, from discounted prices and free equipment, to direct cash investments for specific uses.
Government grants for startup businesses
The majority of government grants are direct grants. Direct grants can be used to pay for essential business requirements including equipment purchases, exports and skills training.
Small business grants vary by region, with each being coloured by local concerns. What each grant will have in common is their strict qualifying criteria, so before your business applies for any grant, it’s important to consider whether your business fits the purpose of the grant, and if your application is likely to be accepted.
For some grants you will need to match the amount of capital provided by the grant scheme, with some grants providing an injection of up to £500,000.
Application success will hinge on a number of factors, often whether investment in your business will lead to job creation in the local area. Grants aren’t handed out easily. You’ll have to clearly lay out how you intend to spend the capital in your business plan and provide evidence for any assertions that you make.
Where can I find out everything on startup grants?
Visit the government’s Finance and Support for your Business site for a comprehensive list of finance and business support available across the UK. You might also want to check out what your Local Growth Hub has to offer: there are 38 across England. Businesses in Scotland should visit Scottish Enterprise to find out about business grants and support. Startups in Ireland and Northern Ireland can access startup funding and support from Enterprise Ireland and startups in Wales can find out what is available for them from Business Wales backed by the Welsh government.
We review some of the main types of grants available below.
Local redevelopment grants
This type of grant will be very specific and targeted to regenerating local areas. Perhaps your business has a social impact on an area, such as bringing communities together. This vital work could mean you are eligible for a government grant.
Alternatively, your business could be one of only a few serving a local area. This effort increases the significance of your startup in your town, city or region, and your worthwhile work will be supported by a range of grants to guide you to success.
Visit gov.uk to be signposted to the community project grants in your area.
The world is waking up to the urgency of the climate crisis more and more each day.
Support can be sought for a range of projects to make your business go green, from boosting the energy efficiency of your business premises to reducing the footprint of your production processes by following energy saving processes.
You’ll find environmental support from centralised government bodies, local councils and special interest environmental groups.
Government financial support for black and minority ethnic entrepreneurs has helped 11,000 businesses become established and stay afloat. Since 2012, more than 11,000 businesses run by minority entrepreneurs have benefitted from loans of up to £25,000.
Grants for women entrepreneurs
There are various grants aimed at increasing the number of female-led businesses receiving venture capital funding. A report in Venture Capital found that all-male business teams were four times more likely to receive capital funding than teams with even just one woman in a senior position. And one such scheme to address this imbalance is the Women in Innovation Awards which is a government run programme offering a £50,000 grant, mentoring, coaching and business support to eight innovative UK businesswomen every year.
Business startup grants for the unemployed
If you are out of work it might feel that the odds are stacked against you when it comes to starting your own business. Lenders might need to see proof of a regular income before handing you money in the form of a business or personal loan, and having an untried concept or business idea might make investors wary of giving you their support.
Thankfully, there are options for unemployed entrepreneurs looking to get financial support, and business grants is a tried-and-tested route. Two established sources for startup business grants for unemployed people are:
New Enterprise Allowance
A great first port of call is the government’s New Enterprise Allowance scheme which helps people who are out of work start or develop their own business. You may be eligible if you are over 18 and either you or your partner get unemployment benefits such as Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance or Income Support.
The scheme provides you with a business mentor, a weekly allowance and the chance to apply for a loan to help with startup costs.
The Prince’s Trust
The Prince’s Trust was founded by the Prince of Wales to support young people. Its long-running Enterprise Programme offers loans, training and mentoring for 18-30 year olds to set up their own businesses. To apply you must be unemployed or working less than 16 hours a week. The Prince’s Trust offers low-interest startup loans and startup business grants.
Startup business grants for the over 30s
While it’s easy to think that startup business grants only apply to younger people who are starting off on their business journey, there are many entrepreneurs who only consider starting their own business once they have gained experience — and possibly saved some money — working in a salaried role first. Taking the plunge into starting your own business after 30 can be just as intimidating a task as doing so in your twenties, and arguably, the risks are even higher as there might be commitments such as a mortgage and a family to support while you do so.
While there aren’t any specific startup grants for the over 30s, there is a lot of support out there for all ages. Check the government’s Finance and Business for your Business page for a comprehensive list.
How to apply for a startup business grant
Thoroughly research the application criteria
Are the aims of your business closely matched to the grant’s aims? Make sure there is synergy between what you want to use the grant for and what the body who administers the grant is looking to achieve before applying. The more closely your aims and the grant body’s aims are aligned, the more likely you’ll be successful.
Prepare a sound business plan
By formulating a thorough business plan, which lays out what you plan to spend the grant capital achieving and how this will generate jobs and stimulate the local economy, you’ll stand your business in good stead for securing a grant.
The less competition for securing grant funds, the greater your business’s opportunity for being considered worthy.
Discuss your application with the body
Talk with the grant body representatives, they’ll be able to outline what exactly they’re looking for, and you’ll be able to tailor your application to suit their expectations.
Assess the capital requirements
If the grant affords you £10,000 capital, assess whether you have the ability to raise matching funds, should the grant have this as entry criteria.
Other ways to support your startup
Startup support - networking
Securing investment is not a sure path to startup success. A fantastic and often underused resource for new startups is networking with the small business community in your local community.
Not only are other businesses in the same boat as you, with the same concerns, challenges and practical advice to offer, they will be able to put you in contact with potential clients for your business, put you in touch with reliable suppliers and even share resources and innovative business strategies.
Networking is a vital resource for small business survival and growth, and it also provides a sounding board for you during probably the toughest challenge of your life. Websites like Meetup show you the networking events in your local area.
Startup support - mentoring
Mentoring like networking is an often untapped source of support and wisdom. Unlike networking, mentors are less likely to be peers and more likely to be respected experts and business people recognised for being at the very top of their respective industries.
With the invaluable guidance of a mentor you’ll discover the reserves of innovation and grit within you, and have a shoulder to lean on in the toughest of times. With support like this you won’t always feel that the weight of your company is on your shoulders, and you can look forward to seeing your business go from strength to strength. Perhaps, you’ll complete the cycle and become a business mentor yourself.
Mentors me offers free access to quality mentoring organisations for startups and small businesses. Allowing users to search for mentors in their local area.
Get targeted support for your startup business
Now you have advice and support from your networking groups and mentors, an important step for ensuring your startup reaches the heights you’ve envisaged is smartly maximising all the resources you have at your disposal.
Startups in the UK can call on a rich supply of free resources aimed at giving a helping hand to new businesses. The British Library has a number of resources for you to glean useful advice from, learn about growing your business, find out about the latest networking opportunities and events in your area and more.
If you are a business bank account customer, your account will probably qualify you for free business banking support, which will include advice and guidance on how to grow your business.
Free marketing resources can also come in handy when your cashflow is moving at more of a trickle. Tools like Canva allow you to create marketing materials, from brochures to flyers to logos — creative assets that you can use in marketing campaigns to raise awareness of your business. Read our 4 easy (and free) ways to promote your business online.
When looking to reach a wide audience, social media promotion is a key tool, and will allow you to reach highly segmented audiences which fit your target market — and you could even use your Canva designs to make your business look more professional and visually appealing to time poor social media users.
If you’re particularly strapped for cash, you can further maximise every free resource available to you with our tips for starting a business with no money.
Compare business loans and business banking
Grants are a fantastic resource for new and growing businesses, they help your business get established during the earliest and often toughest times.
However, despite the obvious benefits of grants, it may not be the right time to apply for a grant for your business, you might find grant terms too restrictive, or alternatively you might find it difficult to find a grant which suits your business needs.
If this is the case, you might be keen to review your options for securing a business loan. Comparison resources help you find the best business loan for your business. Are you getting the best deal possible with your business banking? You might be surprised at the number of favourable benefits your business is missing out on. Explore business bank account comparisons and refine your banking strategy to boost your success.
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Finance Director at NerdWallet UK and business adviser to SME's Nic is spokesperson for small and growing businesses with a strong understanding of the financial needs of business Read more