UK grant funding available to SME businesses

Almost all businesses should benefit from grant funding at some point during their business life cycle. Grants can be awarded for growth, working capital, innovation or to help survive during difficult times. It is therefore important for businesses to understand the levels grant funding available to them in order unlock opportunities and not to overburden their business and stifle future growth.

The UK grant funding landscape is diverse and can require some investigation, with eligibility depending on a whole range of factors. That being said, it is certainly worth taking the time to research and secure sources of business funding you don’t have to pay back.

Types of grants

There are literally hundreds of grants available to SME businesses in the UK and knowing what grants are available and where to find them can be a daunting task and can take time. Examples of some of the types of grants available are:

Start-up grants - There are many start up grants available for new businesses with the aim to generate jobs and stimulate the economy. These grants take many forms from saving money on premises and rates, assistance with plant and IT equipment through to cash rewards to help new ventures grow.

Innovation grants - Grants are available to businesses to develop and realise the potential of new ideas or to develop an advancement in their industry.

Innovate UK is a major funding stream for business-led R&D projects. Research and Development tax reliefs is an incentive designed to reward companies for investing in innovation and is provided as either a cash payment and / or a Corporation Tax reduction.

Job Creation Grants

There are many grants available with the sole purpose to create employment or to encourage businesses to retain their staff.

The Kickstart Scheme is an prime example which provides funding to businesses who create new jobs for 16 to 24-year-olds on Universal Credit who are at risk of long term unemployment. Employers of all sizes can apply for funding until midday on 17 December 2021 which covers:

• 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months
• Associated employers National Insurance contributions
• Minimum auto enrolment pension contribution.

Employers can spread the job start dates up until 31 March 2022. Funding is provided once the young person has started their job.

Where to find grants in the UK

Many grants are backed by the UK government and a good starting point for researching grants is the government’s Business Finance Support Finder online tool and selecting the “grants” tick box. You can also filter by business stage (useful if only searching for start up grants), industry, number of employees and region.

Strong government policy to support SME growth has meant the SME grant funding is a major target of regional funding and additional information on regional grants available throughout the UK can be found on the following portals:

England – The Local Enterprise Partnerships (LEP) Network website lists 38 regional Growth Hubs that were established to provide business funding, support and guidance in their regions.

Scotland – If your business is based in Scotland you may be able to apply for a grant from Scottish Enterprise. The Scottish enterprise website also provides details on grants that are available from other organisations.

Wales – If your business is located in Wales use the Welsh Government's Grants Locator to find and apply for various grants.

Northern Ireland – The SME funding section of the Enterprise Ireland website lists the support available to your business depending on its stage of development.

How to apply for a grant

Each grant is different so it’s important to check your business meets the general terms and criteria before entering the application process.

Here are some key tips to successfully apply for sources of grant funding:

• Read the grant objectives as to what the grant aims to achieve, such as generating employment for a specific local community or target age group. Ensure your application aligns and refers to these objectives.
• Speak to the grant provider to assess your chances of making a successful application.
• Focus on how your business will utilise the grant and use the application to show how the grant will help grow your business and also benefit others and the wider society.
• Develop your business plan and ensure it presents a professional and fair representation of your business. Just like other types of funding grant providers will expect to see a business with a bright future and your business plan is an opportunity to showcase this.  
• Review your funding and future cash flow. Many grants are dependant on the business investing a similar level of funds into growing the business also. If you are seeking a grant which has matching criteria make sure you have the funding available for this.  
• Start applying early as many grants will have a limited pot available and by applying early you may have a better chance of receiving the grant when there are more funding available and potentially less competition going for it.

If you have queries surrounding this and would like to discuss further, please contact our Client Director, Craig Reid or your usual contact.

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