How to get grants for UK businesses

Street sign pointing towards "Grants".

Grants are money you don’t have to pay back. Although there are fewer grants around than there used to be, there are still around 6000 grants currently available to UK businesses. You just have to know where to look.

How it works

Grants are usually awarded to start-ups or early stage businesses for a particular project and because they meet a certain set of criteria. This might be because the business is located in a particular geographical region or operates in a particular industry, or because the entrepreneur meets certain age or circumstance criteria – the Princes Trust gives grants to long-term employed people under the age of 30, for example. The government has substantially cut the number of grants it offers in recent years but still provides grants for research and development.

Who can borrow? Anyone who meets the criteria of the grant-making body.

How much can you borrow

Grants typically range from a few hundred to a few thousand pounds. Grants are almost always match-funded, meaning that you will have to raise half the money you need from other sources.

Advantages

You never have to pay the money back providing you use it for the criteria specified. The organisation providing the grant will sometimes offer support in other ways too, for example through mentoring support and publicity. Being awarded a grant can be very prestigious and be seen as a real vote of confidence for your business.

Disadvantages

Grants are extremely competitive and difficult to get. It can be time-consuming applying for them, so you need to make sure you fit the criteria first.

Things to consider

Grants are usually given on the condition that work on the project for which they are provided has not been started yet. Confirmation that you’ve won a grant could take several months, so you need to make sure your project can be postponed that long. You also usually only get paid the grant after work on the project has been completed, so you need to make sure you have enough money in the bank to cover all costs until then.

The practicalities

You can search for grants available across the UK on the extensive small business grants list we’ve put together.

Case study

Sue Acton managed to get a grant of £15,000 to fund the start-up of her venture Bubbles and Balm, which makes Fairtrade body care products such as soap bars and liquid hand wash, in 2009. She discovered the existence of the grant by chance after ‘endless googling’ and was delighted to find she met the criteria. The grant was provided by Innovation Networks, a government-backed grant scheme which is funded by the European Regional Development Fund and Advantage West Midlands. It is solely for businesses with an innovative new product, process or service projects which will provide benefits to the West Midlands economy.

Sue, who runs her business from her home in Leamington Spa, used the grant to pay for ingredients, packaging and labelling of her products, which were some of the first Fairtrade body care products sold in the UK and are bottled in distinctive recyclable aluminium bottles. Her products are now sold in Waitrose supermarkets, Oxfam and high street shops, and the enterprise has a turnover of £100,000. She said: “It was so fantastic to be given a grant. It meant I was able to invest in better equipment and to be much more professional in the way I set up the business.”

Top tip

An alternative to getting a grant is to win a competition. There are several competitions for start-up entrepreneurs run each year in the UK and if you are shortlisted or win you will benefit from much publicity too. Shell Livewire gives the winner of its Young Entrepreneur of the Year competition a cash prize of £5,000, for example, while The Pitch competition run by Business Zone, provides its winner with thousand of pounds worth of business support, services and products.



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6 comments

  1. Edward Kay Reply

    Hi I am looking for advice please on getting help to start a business out of the mess with flooding etc. It would be fantastic if you could give me some help on which way to go from here.
    Many Thanks
    Edward Kay

    1. David Friel Reply

      Hi Edward,

      Afraid not an expert in this area and not enough detail to help, if your insurers being a nightmare you could speak to the Ombudsman. Hope it gets sorted!

      David

  2. Victoria Hardeman Reply

    Hi looking at starting up in hair and beauty industry have several qualifications and 9 years experience already but time to go it alone. Have a room within a busy hairdressers lined up part time and planning working from home also part time (new mum) how do I go about getting funding as my previous partner left me with a debt so credit score not great.

    1. David Friel Reply

      Hi Victoria,

      It’s a tricky I can imagine it would be difficult to find investors for that kind of endeavor, suggest you start with friends and family, maybe a crowdfunding campaign and raise the minimum needed to get going. Start working at people’s houses and then expand to a store when cash allows.

  3. Louise Angus Reply

    Could anyone advise me on what grants I could apply for / could be entitled to? I’m a single mother of 2 looking to set up a property management company.

    Thanks in advance

    Louise

    1. David Friel Reply

      Take a look at the local councils website in your area, they typically have a list of local grants for small business owners as well as a big list of national.