Gain access to grants

There are government grants available from both UK and EU organisations.

There are government grants available from both UK and EU organisations.

There are grants available from both UK and EU organisations. Some are targeted specifically at very small companies (50 employees and under) and start-ups, but most are available to small- and medium-sized enterprises in general.

These are defined by the EU as companies with no more than 240 employees and turnover of up to €40 million, and by the Department of Trade & Industry as companies with no more than 250 employees and turnover of up to £11.2 million.

The Prince’s Trust may be able to help start-ups to secure a grant. It can award a grant of up to £1,500 for individuals and £3,000 for groups. These funds are generally available to people who have not been able to get the funding they need from other sources.

Who is eligible for the government grant?

Eligibility for small business grants is usually assessed on the following criteria: the size of your company, location and what you require the grant for.

“Many of the grant-awarding bodies have a range of different agendas. Most will look to match the money that a business is prepared to put in, rather than giving money with no strings attached. Eligibility is heightened if the project you seek funding for will, for example, boost employment in your area,” says Alick Jones, head of franchising at Lloyds TSB.

Location is an important aspect of the grant-giving process. Many grants are targeted at parts of the UK defined as “assisted areas” – regions where funds are granted in order to boost employment and create new business. These funds are called Regional Selective Assistance, and the regions can also qualify for enterprise grants for projects, up to the tune of £500,000. The Small Business Service has information on the “priority” areas targeted for grants for the next four years.

Information on government grants:

Your local Business Link is a good source of information, as it will have comprehensive knowledge of what is available for the region and the type of business you have.

Jones also recommends approaching business managers at local bank branches, as they will have a good idea of what is available in the immediate area.

If you are looking for grants for work-based training schemes, the Learning & Skills Council is responsible for funding education and training via 47 local offices and is a useful source of information.

A recently-published guidance pack, ‘Access to EU Funding’, helps small firms to find out what kind of grants and loans are available in Europe. For a copy, ring 0870-150 2500 (quote URN 02/324). You can also contact the European Commission on 020-7973 1992 for further information.

Another comprehensive source of business grants is j4b, a free-to-search service which has information on 1,200 cash grants, 200 soft loans, 40 business awards, 630 public sector grants and 20 public sector loans. SMEs can find information on the schemes they can potentially apply for by entering their location, sector, size and the purpose of the grant (for example, training) in the search facility.

It is worth regularly checking the grants available, as according to j4b grant availability is in a state of constant flux, with new schemes being launched and others being revised or withdrawn. It estimates that around 140 schemes are either deleted, amended or created every month and more than 95% of entries have changed in the site’s first year of operation.

j4b warns about using organisations which claim to help you source and apply successfully for grants. They will usually ask for a fee to be paid upfront, so make sure you know exactly what you are getting.

The application process of getting s government grant:

Grant-giving organisations usually receive applications direct from a company or individual. If you have an accountant, it is worth asking if they can help you with the application. Once you have decided which body you will approach, phone and ask for some basic facts, such as whether the grant is still being awarded, the deadline for applications and what you need to prepare in order to qualify. A good way to assess whether your project or business stands a chance of gaining the grant is to see what projects have been funded in the past, and what the success rate is.

If you decide to go ahead, you will usually need to submit a proposal in the first instance. This is similar to a business plan and should contain details of the project you are seeking funding for, together with a description of the benefits it will bring (such as boosting employment) and a proposed timetable for implementing it.

Applying for a grant is fairly straightforward, but processing the application can take a very long time, so do not plan on getting the money within a month.

“Remember that the vetting process can be quite long, and grants are not a source of finance that can be counted on, especially as grant bodies have their own time-scales and committees that meet at different times. Get to know the organisation as well as you can,” advises Jones.

To increase your chances of success, make sure your business plan is very thorough, and back it up with comprehensive research and figures. Also, remember that grants rarely pay more than 50% of the project, so make sure you can match the funds that you will be awarded.

“Be realistic in terms of expectation. It may seem tempting to view grants as money for nothing, but grant organisations are thorough when it comes to looking at what they get in return,” says Jones.

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