Best Small Business & Start-up Government Grants

Learn all about small business grants.

Updated: April 2, 2024
Matt Crabtree

Written By

Matt Crabtree

 

Small business grants have probably come up if you're a business looking for financial support for a project. Grant funding is ideal for getting free money to help finance a project or help business growth.

Sure, it's not as easy as applying and being accepted, as a lot goes into grant funding.

Over 100 government grants are currently available for small businesses across the UK.

Although there are grants that cover almost anything, there is the matter of eligibility and whether the grants are relevant to your business.

In this article, you'll learn all about small business grants, government business grants, what grants are available, and how you can start applying for financial support.

Different Types of Business Grants

Before you dive into filling out grant applications, you should know that there are different types of business grants.

Each type focuses on various areas of helping businesses, and the application process and criteria differ between grants.

There are three different types of business grants you may come across:

  • Direct grants: These grants are project specific. With a project in mind, you'll apply for this grant and can only use the funds for the project costs.
  • Tax relief: Government schemes designed to help cut the tax burden on business owners with small businesses. There are different types of grants offering tax relief.
  • Resource and training: If you want to expand skills development or need access to resources to help get a project going, several resource and training grants are available.
  • Revenue grants: Revenue funding, or revenue grants, are used where no lasting asset exists. Revenue funding is used to help put on events, activities, and performances and covers an organisation's running costs. These events can be for education, to support health and well-being purposes.

In the following sections, we dive into more detail about the four types of business grants and provide some examples you can check out.

Direct Grants Funding

Direct grants fund specific projects. If you've got a project your business is working on, you can get grant funding to help pay for specialist resources and any other things you need to make the project successful. Direct grants help you access funding that perhaps you didn’t have before.

Direct grants involve cash directly given to a business and can only be used for a specific project. The grants are usually match-funded grants, which means you have to put forward half the money of the project costs.

With most match-funded grants, all criteria conditions must be met to be accepted. All the money you’re awarded has to be spent on the project, and you may have to show proof of purchases. In the application process, you’ll need to outline your plans for the grant and how it can enrich your project and help towards the success of your business.

Tax Relief Grants

If you're a small business looking for some support with tax, the government has schemes designed to help cut the tax burden on small businesses.

There are several taxes enterprises are expected to pay, such as Corporation Tax, Income Tax, VAT, Employer’s National Insurance contributions, and Capital Gains tax. So, by looking at grants that cut tax costs, you can try to reduce your tax rates and recoup some money so you can put it back into your business.

There are different types of relief grants that you may come across:

  • Corporation Tax Relief: As of 1 April 2023, the main rate of Corporation Tax is 25% of profits for the financial year for profits above £250,000. For a small profit rate below £50,000, 19% of profits are taxable. Tax can be challenging for a small business, so there are Tax Relief grants like Marginal Relief that allow you to claim if your business’s taxable profits are between £50,000 and £250,000.
  • Business rates relief: If you're a business in England, you may be eligible for a reduced business rate bill. If you're a small business, a retail, leisure or hospitality property, a local newspaper, an only business in a rural area, or part of charitable organisations or a community amateur sports club, you could apply for business rates relief. It's a small business grant that can help you if your property's rateable value is less than £15,000 but more than £12,001. The relief rate will gradually decrease from 100% to 0%. If your rateable value is below £12,000, you will not pay business rates on the property.
  • Employment allowance: You can reduce your National Insurance liability by up to £5,000 per year with Employment Allowance. You can only claim against your employer's Class 1 National Insurance liability. You can still claim the allowance if your liability is below £5,000.

Grants for Resources and Training

If your business needs access to resources to help get a project going, you can get grants to help cover project costs. Most grants for resources and training are designed to help small businesses grow and give access to resources that perhaps weren’t previously available.

There are grants to help you and your team train and gain valuable skills to support the project's flourishing. The following for grants for resources and training

  • Local business grants: Seek local support from your local authority. Some offer business grants to support local businesses to help the local economy grow. The local authority could help you in other forms, like fund training workshops, offering expert advice, one-to-one support, and business accelerators.
  • Business support help: If you're looking for support with business finance in general, you can speak to someone from the business support helpline, they can point you in the direction of government-backed schemes, and you can get help with exporting, tax, writing business plans and more. The helpline is available to all UK businesses, and you can seek help via email. If you prefer to get guidance over the phone, there's a different number on the website depending on where you're based: England, Scotland, Wales and Northern Ireland.
  • Innovation grants: Several government grants help businesses deal with research and innovation. Funding by the government, Innovate UK awards up to £5000 to small businesses, start-ups and established SMEs to support your innovation project. Innovation grants are predominantly tech-based. Some help you invent or improve tech or provide you with tech equipment to help grow your business.

Revenue Grants and Funding

Revenue-based financing is financial capital given to small or growing businesses. Investors inject money into a business for a fixed percentage of ongoing gross revenues.

Revenue funding is used to help pay for events and activities. These events can be for education, to support health and well-being purposes. Simply put, an outside party covers some or all of the costs involved in the event.

If revenue funding sounds relevant to your business, Growth Works offer revenue expenditure across different expertise like marketing, leadership, account and finance, legal advice, IT, and more.

Where to Find Grants for UK Businesses

If this is your first attempt at looking for government grants or any other small business grants, you may be overwhelmed by the thought of looking high and low to find small business grants suited for your company. There’s no harm in needing a little help with finance; grants are created to help existing and new businesses. 

They exist for you to take advantage of. The money is allocated specifically to help businesses like yours. The grants you’ll be eligible for will vary, as some are for strictly new businesses, and most grants aim to support existing businesses.

Grants will be available no matter where your business is based in the UK. Especially if you’re a small business, many grants are designed to help you grow and offer support. As well as the UK government, the Welsh government, the government of Ireland, and the Scottish government also provide business funding.

Looking for government-backed financing is a great place to start, so search the relevant government website to see what grants are readily available.

If you haven't started your business, but you're looking at grant funding before you commit, we suggest the following websites:

  • Begin with the UK government’s Business Finance Support Finder to see what initial business finance support is available. 
  • The Welsh government has a similar list of grants on its business grants page. You can also use the Funding Locator on the Welsh government website.
  • Try Invest North Ireland for support for local start-ups if you’re in Northern Ireland,
  • If you're based in Scotland, the Scottish government has over 600 grants and funding options on the Funding Opportunities page.
  • For small businesses up to larger enterprises based in Northern Ireland, you can look at Enterprise Ireland. To look at all business grants and business support in Northern Ireland, try NI Business Info

Some grants are area specific, so you should see if your local council offers any funding and support. Local grants are designed to propel businesses in the area in the hope of increasing jobs and building the local economy.

Some city councils provide free business support as well as potential funding. You can contact your council, and they can point you in the right direction for further gaining funding support.

You may find grant funding close to home as well as further afield. Consider contacting other businesses in your market. Although you’ll unlikely gain funding from other businesses, you could gain valuable knowledge, ongoing support, and a better understanding of how to grow your business. 

You can set up Google Alerts for small business grants to be notified when new business grants become available. There are websites available like Swoop that match you with available grants that are suited to you. Tools like this can save you time and notify you of new grants so you don't miss out.

Looking for business grants should be something other than a one-time occurrence. Grants become available at different times of the year, so you should put as much into grant searching as possible.

Try to dedicate some time in your week to focus on grant searching. You may find grants as they appear, and applying for new business grants early could work in your favour as, hopefully, the grant budget will still be full.

What Small Business Grants Are Available?

Now you know the different types of business grants, and you know where to look for more business funding. We want to help you even further with your business finance. We've researched what small business grants are available as of August 2023.

There are various types of grants that you can apply for depending on your needs and circumstances. This section covers small business grants from the UK government and other parties.

Small business grants provided by the government:

  • Air quality grant schemes: Defra is offering funding to eligible local authorities with the air quality grant scheme to help improve air quality and create a greener environment. Local councils can apply for the grant, and once awarded the funds will be allocated appropriately. There is a chance that local authorities can be awarded at least £6 million. The idea is to improve local air quality and awareness of air pollution. The awarded money would be allocated to local projects focusing on the risk of air pollution.
  • Grants for installing high-speed broadband: The government is providing up to £210 million in funding to help people experiencing slow broadband speeds in rural areas. The Gigabit broadband grant scheme gives you a voucher worth up to £4,500 for homes and businesses needing help to cover the cost of installing Gigabit broadband. You can check your eligibility for a voucher by entering your postcode into their website.
  • Taking on apprentice grants: If you're considering taking on extra employees, consider taking on an apprentice. You can get help from the government to train an apprentice in your small business, and various schemes help you employ people, so the grant benefits you and the government. The government can pay up to 95% of eligible costs. All you need to do is fill out the enquiry form to ask about available funding from the National Apprenticeship Service.
  • Innovate UK: Innovate UK supports business-led innovation in all sectors, technologies and UK revision. The grant helps businesses grow by developing and commercialising services, new products and processes.
  • Business Grant Schemes: If your area council is Mansfield District Council, you could apply for a Business Start-Up Grant of up to £2,500. The grant can be used towards costs for machinery, equipment, and business stationery, and it can be used to contribute to your marketing strategy and pay for web design and advertising. This grant is for small businesses that have fewer than four employees.
  • Energy Bill Relief Scheme: Energy bill relief schemes are designed to reduce energy costs for non-domestic customers in Great Britain and Northern Ireland. Existing businesses that started a fixed-price energy contract on or after 1 December 2021 can apply. The government will provide a discount on your gas and electricity.
  • Business Growth Programme: This is one of the government's capital grants that support expansion projects that create jobs for the local community in the Leeds City Region area. You can get a Business Growth Programme grant from £10,000 up to £50,000. These government grants are for businesses in or moving to the Leeds City Region, including Bradford, Calderdale, Kirklees, Leeds, and Wakefield. To be eligible, you need to have an established business for at least 12 months, have 100 employees or less and have a capital investment project over £50,000 that creates jobs.
  • Empowering Small Businesses Trading Internationally: If you’re a small business in the East Midlands in the importing or exporting industry, you could be eligible for funding, training and support to overcome barriers in global trade. The scheme will help establish cost-effective, sustainable supply chains and help your business grow its brands overseas.
  • R&D tax relief: Research and Development (R&D) tax support companies seeking to develop an advancement in their field. You can reduce your tax bill by claiming relief on things related to the research project, including utilities, project materials, and staff wages. You can claim if you have less than 500 staff and have a turnover of less than £100m.
  • Established SME Funding: If you're a small to medium-sized business with ten employees or less, you are eligible for the Established SME Funding grant. Various grants are listed for companies in Northern Ireland and other parts of Ireland looking for revenue and expansion grants.
  • Seed Enterprise Investment Scheme: This investment scheme helps companies raise money starting to trade. You can receive up to a maximum of £250,000. To be eligible, you must carry out a new qualifying trade, have less than 25 full-time employees, and your business needs to be established in the UK and not have gross assets over £350,000. You can use the money for a qualifying trade or prepare to carry out a qualifying trade, including research and development of a qualifying trade.
  • Marginal Tax Relief: If you're a small business whose profits fall between £50,000 and £250,000, you may be eligible for Marginal Tax Relief. This grant is designed to gradually increase the Corporation Tax rate between a small profit and main rates. You won't qualify if you're a close investment holding company. If you visit the UK government website for Corporation Tax Marginal Relief, you can calculate how much Marginal Relief you can claim.
  • Regional Selective Assistance Funding: RSA is a discretionary grant to encourage capital investment and job creation in Assisted Areas in Scotland. The grant is designed to create jobs and fund a greener economy. The grant is available for businesses who want to develop a project in an Assisted Area.
  • Low Carbon Workspaces: A grant scheme funds Small and Medium Sized Enterprises towards projects that reduce greenhouse gas emissions. The Low Carbon Workspaces business grant is match-funded between £1,000 and £6,750. To qualify for the funding, your commercial premises must be within one of the suitable areas: Bedfordshire, Berkshire, Buckinghamshire, Hertfordshire, Milton Keynes and Northamptonshire.
  • Smart: Scotland Grants: If you've got a high-risk, highly ambitious project, the SMART: SCOTLAND grant aims to help research and develop such projects. The grant is used to conduct feasibility studies. This R&D grant is only available to small and medium-sized enterprises in Scotland.

Government grants are helpful and usually easy to find, but business grants are available elsewhere too. We've compiled a list of small business grants provided by other parties that you could be eligible for.

Grants not provided by the UK government:

  • The National Lottery Heritage Fund: The heritage funds help a broad range of projects that connect people and local community groups to the UK's heritage. Projects include nature, designed landscapes, cultural traditions, large-scale rural projects, oral history recordings, community archaeology and more. You can use the money on activities, repairs, conservation professional fees, and more.
  • Northern Powerhouse Investment Fund: This grant is delivered by the British Business Bank and geared towards businesses in the north of England. The Northern Powerhouse Investment Fund is available to small businesses and SMEs to help grow business through debt finance and equity injection.
  • Women in Innovation: The Women in Innovation programme allows 50 women entrepreneurs to embark on a 12-month journey with a bespoke business support package. The package includes £50,000, tailored business coaching with ongoing support, mentoring, networking, and training opportunities to help grow their innovation further and to help reach new markets. The grant was set up to address the under-representation of women in business innovation and elevate women in business to enable women across the UK to achieve their business vision.
  • Arts Council England: If your business is in a creative industry and working on cultural initiatives and a creative project, you may be eligible for the Art Council England grant. You can be awarded between £1,000 and £100,000. The Art Council funds programmes covering Music Hubs, Capital Investment, Libraries Improvement, Museum Estate and Developments and more.
  • Innovative UK EDGE: If your business is in the early stage, growth stage, or scaling with up to 500 employees, you may be eligible for the Innovate UK Edge grant. Innovate UK offers innovation-driven businesses to grow and achieve industry and society-transforming ambitions.

Business Grants for Other Established Businesses

There are grants for many different groups of people, businesses and situations. You may not be a small business; you could be a start-up or a company that has been established for a while and simply looking for business funding outside government grants.

We've found some more business grant options for businesses that may not all be under the classification of a small business.

A list of business grants that are available for start-ups and other businesses:

  • New Enterprise Allowance: This grant provides funding to start or develop new businesses. To be eligible for start-up grants, you must be over 18, and you or your partner must receive Universal Credit, Income Support, or Employment and Support Allowance.
  • Unemployed entrepreneurs: Technically, this isn't a grant, but if you're currently starting a business and claiming Universal Credit, you may be eligible for a 12-month start-up period. You'll receive UC payments on your self-employed earnings and won't have to look for other work. The government has information on their website about starting your own business.
  • The Prince's Trust: For young entrepreneurs aged between 18 and 30, the Prince's Trust provides start-up grants to those who want to start and run their own businesses. The trust also offers resources like training and mentoring.
  • Apprenticeship funding schemes: If you want to grow your business as a start-up, consider hiring apprentices. The government will contribute to apprenticeship training and assessment, and you may get an additional payment of £1,000 depending on the apprentices you hire. If you don't pay the apprenticeship levy, the government will pay for 95% of the training. If you pay the apprenticeship levy, you'll get a grant towards the cost of training, and the government will add 10%.
  • Feast2 scheme: The Feast2 scheme is government grant funding for specialist support for food and drink manufacturing businesses based in Derbyshire, Nottinghamshire, and South East Midlands. You can benefit from business mentoring support, grant funding for up to 25% of production equipment purchases, and technical support, including product testing, certification, and labelling advice.
  • The Third Sector Investment Fund: A grant for third sector organisations like charitable organisations and social enterprises across the UK that impact helps disadvantaged individuals in local communities. The Third Sector Investment Fund loans between £250,000 and £3 million to third-sector organisations across the UK to support job creation and enrich communities.
  • CRACK IT Challenges: CRACK IT is a challenge-led competition that funds collaboration between SMEs, academics and industry to solve business and scientific challenges. Depending on the Challenge, contracts for up to £1M for up to three years are available. The challenges are to benefit 3Rs technology advancements.

How to Get Government Business Grants and Other Small Business Grants

Once you've done all the research you need for your desired business grants, it's time to start the application process. Sure, you can create an application, but much preparation is required to aid your application in becoming successful.

  • Talk to the grant body: Talk with the grant awards body to assess your chance of a successful application. When you speak with the relevant grant provider, find out what they want. Grants are there to create jobs and help small businesses. The money is allocated to support the national and local economy. Government grants are competitive, so finding out what the application needs will help you fill out the best application.
  • Read grant requirements and objectives: You should only apply for a grant if you meet the full criteria. This saves both you and the grant organisation time. You shouldn't be applying for small business grants if you're a large business. The application process can be long, and by looking at the objectives and requirements, you can see if your business or projects can benefit from the grant funding in question. When you apply for a business grant, you'll need to provide evidence that you meet the criteria, and you'll have to explain why you need the funding and how you plan to use it. Each grant will have its criteria, don't just assume because you're eligible for one, you'll be eligible for most grants.
  • Create a business plan: The awards body will want to see a professional business plan. Established businesses may also have to provide their position and balance sheet examples. Your business plan should demonstrate where your business is going, where it has been, and your next steps. Demonstrate how the grant funding will help your business and the effect it will have if you're awarded it. Your business plan should make the grant body believe in your business and its future. You must demonstrate why your business should be chosen for the grant over others.
  • Focus on grant use: Most small business grants are awarded for specific reasons or projects, for example, to help job creation or to help a project get off the ground. You need to explain how the grant money will benefit your business. You need to demonstrate clearly how you plan to use it. If you're pursuing a small business grant specialising in tech development, talk about the effects and benefits of the new tech for your business and the local economy.
  • Check funding: Some grants will give business funding without wanting anything in return. However, some grants expect you to match the amount they're giving you. So, you pay half of the costs yourself. Ensure you understand the grant's conditions and if you can afford to pay half the cost if it deems necessary.
  • Apply early: Avoid waiting too long to apply for a business grant. There is usually a certain amount of money allocated in a grant, and once it's all been allocated, there won't be any more money awarded. Equally, there may be a lot of businesses applying for government grants, so try to apply as soon as the grant launches or as soon as you come across it.
  • Keep a close eye on deadlines: Don't miss out on the perfect small business grant because you lost track of the closing date. Make a note of submission dates and what you need and plan accordingly.
  • Consider hiring a consultant: Running any business, a small business or a large business, is time-consuming. You may not have the time or resources to search for government grants. Consider hiring a grant consultant, they can track down grants that provide business funding, and they're experts in knowing the best way to apply. Grant consultants will take on the responsibility of communicating with award bodies. A grant consultant is an extra cost for your business, but they could help you access grant funding. A consultant can help you find free support and help you grow your business with the grants they find and help you apply to. It should be noted that some grants won’t allow someone to apply on your behalf.

Tips for Applying for Small Business Grants

The grant application process can be stressful and timely, so it's always best to prepare.

A considerable part of grant funding is pitching your project and sharing the delights of your business. To make the application process less daunting, we've compiled a list of tips to help you with what to include in your grant proposals.

Valuable tips to help you with applying for grant funding when writing your grant proposal:

  • Outline project costs: Every penny from a business grant needs accounting for. The awarding body needs to see exact costs and predictions. You must demonstrate how to spend the grant money and detail what can be achieved. Creating a cash flow forecast, including your annual turnover, is helpful for many business grants, as they'll want to see how you're succeeding as a business.
  • Check eligibility: To save time with the application process, check if you're eligible for the business grant you want to apply for. Some government grants have specific criteria like having a certain number of employees or other requirements.
  • Define project: Some government grants can only be used on specific projects, so if you've got a project that matches perfectly with a business grant, you'll need to define the project in detail in your application. Searching for grants with projects in mind is an excellent way to find financial support and funding. When defining a project, you should include costs, the aims and objectives and how the awarded money will help the project.
  • Share objectives: Whether you're applying for a small business grant or a scheme that helps a project, you need to share your business and project objectives. Sharing what you hope to do in your business plan and application will give the awarding body a clear idea of your business and project. Make sure your objectives align with those of the grant.
  • Outline a timeline: You can't be vague when outlining the use of the awarded business grant; you need a clear timeline of how long the project will take. Outline when the project started or will start and when you plan to achieve your goal posts and include when you hope the project will be complete.

Alternative Funding Options to Business Grants

After all this, you might wonder if business grants are the best way to approach business funding.

There are other methods you can consider helping your business grow:

  • Trade credit: Trade credit is an unsecured debt that allows a business to borrow goods from a supplier with an agreed-upon deadline for repayment. Trade credit gives you more time to pay for the goods or equipment, and usually, these agreements are interest-free, so you only have to pay back the cost of the goods.
  • Equity finance: You can raise funds by selling shares in your business in return for finance. You can use equity finance schemes that offer tax relief with up to a 50% reduction in income tax on investments made in new businesses up to £250,000 with the Seed Enterprise Investment Scheme.
  • Business angel funding: If you’re great at pitching, you could try to approach wealthy individuals to invest in your business idea. Business angels usually fund businesses with aligned values and missions, like developing companies in specific sectors or regenerating local communities.
  • Business loans: If you require a large sum of cash to help grow your business but no grants suit your business, consider taking out a business loan. Some start-up or business loans offer higher funds than a small business grant. A business loan may be easier to accept than government grants. Business loans usually have fewer requirements and focus more on the financial health of your business. If you're considering start-up loans, try the British Business Bank, they offer free business support and various start-up loans, grants and schemes.
  • Purchase order finance: This option helps businesses pay their suppliers and aid cash flow. A purchase order finance is an advance to a supplier (from a finance provider) secured against a confirmed purchase order. This option is available to businesses of all sizes.
  • R&D tax credits: A financial service that uses tax credit payments from HMRC as security or collateral. A tax credit loan gives your business access to an affordable loan.
  • Invoice factoring: If you’re a business in trading, you can sell your unpaid invoices to invoice financiers, who’ll pay you the total amount upfront (around 85%) and then collect the debt on your behalf. The remainder of the outstanding balance on the invoice will be paid once it’s been paid by the original business that owed you the money. Invoice financiers make money from company fees and the interest they charge for their services. This financing option is ideal for generating cash flow and frees you from managing your business ledger.
  • Crowdfunding: If you’re a startup, consider crowdfunding, it’s a popular method for raising funds directly from the public and small investors. You must apply with a business plan and market your business to gain support. You need to make people believe in your business idea. In return for funding your vision, you’ll need to give them something in return for investment, like early access to your product. Not only are you showing your appreciation and support, you may even gain feedback for your product before the launch.

Final Thoughts on Small Business Grants

Finding funding isn't done in one sitting. To make the most out of grants and ensure you take advantage of all opportunities, you must continue to put time and effort into finding and applying for grants.

So, now you know what grants are available and where you can find small business grants. You can start applying for grants. With all the grants we’ve mentioned and the ones you’ll come across in your search, there is a lot of promising funding to help grow your business. 

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