How do I finance my business through grants and awards?

Grants aren’t just about handing out money to any aspiring business, they are usually project or proposition specific. However, did you know you could also have access to funds for training, research and development just because your business is in an assisted area?

In addition to this, each year numerous awards are also up for grabs. These usually recognise achievement, and can often bring publicity as well as financial support.

An example is the Shell LiveWIRE awards, which have been set up to support young entrepreneurs starting up in business. Awards are therefore a limited source of funding for every business, but do give the few businesses who qualify a significant boost to their development.

 

When is this right for you?

Grants and awards are particularly suited and available to:

• Start-up businesses
• Younger entrepreneurs
• Businesses in industrial areas with above-average unemployment
• Businesses in rural areas
• A business who has a specific project they could not otherwise hope to complete.

 

Advantages of financing with grants and awards

• The main advantage in securing a grant or an award is that these do not normally need to be repaid. 

• Grants often reflect the specific needs of applicants and provide a source of funding when other sources of finance may not be available.

Disadvantages of financing with grants and awards

• Grants, awards or support packages are not available to all businesses and can be difficult to obtain.
• They may be limited to a specific task or goal, supporting the objectives of the organisation giving the grant or award.

What will they measure me against?

Usually you will be measured on at least one of the following criteria when considered for a grant:

• Where your business is
• How big your business is
• What industry sector you are in
• What you want the grant for – specifics.

  

 

Local support

Most local areas have funds available for small businesses, often provided through local authorities, Local Enterprise Agencies, Learning and Skills Councils and Business Links. There may also be independent funds and trusts that are less well publicised so it is worth doing some digging online.

Local Enterprise Agencies (LEAs) run a range of schemes to support start-up businesses. The type of support varies depending on the area but typically includes financial support as well as business planning and help on getting funding through grants. Your LEA will have it’s own website with information on all of these areas so it’s worth checking it out.

 

Regional support

Regional Development Agencies (RDAs) provide grants towards regeneration and sustainable development in rural areas throughout England.

In industrial regions, support is often available in communities affected by a reduction in traditional industries. This support is often in the form of equity funding or loans. Use your RDA’s website to find out more about the types of services that they offer.

 

The Small Business Service

A wide variety of initiatives are offered through different organisations established by the Government, a number of which offer financial support including grants:

• The Small Business Service (SBS) (www.sbs.gov.uk) runs the SMART scheme which provides grants to help businesses make better use of technology and develop new products

• They also operate the Small Firms Loan Guarantee Scheme for businesses looking for loans. The SBS acts as guarantor for a percentage of the loan in certain circumstances

• The Phoenix Fund (www.sbs.gov.uk/phoenix) has been set up to encourage business start-ups in disadvantaged communities and groups.

 

The Prince’s Trust

The Prince’s Trust (www.princes-trust.org.uk) provides support to young people aged 18-30, who are either unemployed or working in an unfulfilling job, to start up in business. This assistance is particularly aimed at disadvantaged people who would find it difficult to obtain finance from the usual sources of business finance.

 

The Grants and Support Directory (GSD)

This is an online database that you can search for potential sources of help either at the start-up phase of your business or to help with further business development.

It is an extensive database that includes information on central and local government grant and support schemes and schemes available through private organisations. The GSD database is available to access through the Business Link website.

 

European funding

Funding from the European Community is available through a number of schemes mainly supporting research and development, including the European Regional Research and Development Fund.

 

Finding out more

You should contact the organisations directly to find out the availability in your local area or for your particular business.