No matter what stage your business is at, there may be times when you’re considering the benefits of applying for grants or funding – whether direct grants from the government or crowdfunding through an online platform.
The process of winning grants and other funding usually means you’ll need to put a fair amount of work in. This can include actively applying for the grants, carefully ensuring your application is up to scratch, and double-checking you’re actually eligible to apply (so checking this beforehand could save you some time!).
Some of the terminology – like most things to do with finance – can be quite confusing, so in this article we’ll look at what types of grants are available, and share some tips on how to apply.
What are business grants?
A business grant is a sum of money awarded to a business to help it grow and develop. They don’t normally need to be repaid, and can be used to help with general costs, or they can be given to a business for a specific purpose such as learning and development, new equipment, or even to launch a new brand. They’re often awarded by government schemes or bodies, organisations, and even large companies.
Where can I find business grants?
Doing a spot of online research is a good place to start. If you live in the UK, head over to the GOV.UK website to find government grants as a starting point. You can enter keywords such as ‘start-up funding’, or ‘Liverpool business grant’, to help target your search and find options you qualify for.
You can also check what’s available in your local community. As an example, if you’re based in London, you could head over to The London Community Foundation and view their list of business grants.
It’s always worth checking your local council too, and networking to find companies who may be offering grant funding to small businesses like yours.
Other popular business grant providers include The Prince’s Trust Enterprise Programme and Seed Enterprise Investment schemes.
Don’t forget to check the eligibility criteria before you spend several hours making micro-adjustments to your application. For example, you won’t qualify for the Seed Enterprise Investment Scheme if you’re in a partnership, and you won’t get funding through The Prince’s Trust Enterprise Programme if you’re over 30.
What types of grants are there for my business?
There’s all sorts of grant funding out there, so they can be pretty varied. Some give you the freedom to spend the money where you see fit, while others will only award funding for a specific project.
Grants for start-ups
The emotional rollercoaster of starting a new business can range from total euphoria to feeling like you’ve done battle with a rhinoceros, so the prospect of sorting out funding might seem rather overwhelming. Fortunately, there are lots of different types of start-up grants, and they often come with the offer of mentoring to help you learn how to push your business where you want it to go. Some organisations even include equipment and training. Which is jolly nice of them.
Matched funding grants
This type of grant normally involves pitching your project to a social bank, trust, foundation, or another type of organisation. If awarded, they will ‘match’ any funding you already have from other sources.
In other words, for you to qualify and receive funds, you’ll need to contribute a certain amount and then the granting organisation will ‘match’ it. It isn’t always a 50% match though – some organisations may ask you to put a smaller amount towards the money you’ve asked for. Just be aware that the funding organisation might withdraw their offer if you don’t have enough funds of your own to contribute.
Dedicated grants
This type of grant is awarded for something specific, so you won’t be able to use it for anything else. Apply for funding to help you buy new computer equipment, for example, and you won’t be able to put it towards a new coffee machine instead.
How do I apply for business grants?
This varies depending on the organisation you’re applying to, but you’ll normally need to fill in an application form and supply any supporting documents.
Even if you don’t have any questions, you could still reach out to the grant body for a chat about the application process, what to expect, or anything else you can think of.
Pay close attention to the grant objectives
Why is the organisation offering the grant? What are the key objectives? Understanding what they’re trying to achieve will help you explain how you’re a good fit – grants are all about the grant giver and the receiving business having a common goal.
Will I need to write a business plan?
We know the actual process of writing a business plan is up there with root canal (unless you’re a dental professional) but they are incredibly useful documents – and very often a requirement in a grant application.
Do I need to show grant funding in my accounts?
Yes, just like any other source of funding or income, you’ll need to show the grant in your financial records. The funding organisation might ask for the details of what it’s used for, but it’s also important to track this for your own purposes too.
You could create a separate project in your bookkeeping, and use this to monitor the spending related to each grant more easily.
For example, Pandle Projects allows you to tag transactions relating to a specific project – helping you both monitor and report on things like how much has been spent from that particular pot of money, and what it’s been spent on. You can have different projects on the go, too. For example, ‘Funding for employee training’ or ‘£20,000 for research and development’.
This helps you ensure you stay compliant with the grant conditions, and also keeps any funding bodies updated if this is a condition of being awarded the money.
Will I need to pay tax on a business grant?
Yes, most business grants are taxable as a source of income – but remember to offset any expenses so you can claim tax relief. Which is another very good reason to keep track of what comes in and goes out of your business!
If you’re looking for efficient bookkeeping software to manage your grants, you’ve come to the right place! Create a free account or use Pandle Pro or £6 per month.
