5 Business Startup Grants & How To Apply

09-May-2024
09-May-2024 11:01
in Commercial
by Sam Hodgson
Business Startup Grants

Helping startup businesses is a key part of the UK government’s plan, so there are plenty of financial incentives out there to get your company off the ground and grow it in the early days.

One such helping hand are business startup grants - capital provided to your company that you don’t have to pay back.

If the idea of free money to give your business a financial boost is enticing, then read on!

Table of Contents

What is a Business Startup Grant?
Where do Business Startup Grants Come From?
The 5 Types of Business Startup Grants
How to Apply
Alternatives to a Business Startup Grant
Discussing Your Startup Funding with Experts 

What is a Business Startup Grant?

Business startup grants are injections of capital provided to companies to help entrepreneurs take their ideas and make them a reality.

They offer financial assistance throughout those first few years of your business while you find your feet and make your enterprise stable and self-sufficient.

Unlike a business loan, a business startup grant never needs to be repaid.

And unlike outside investment, a business startup grant will not dilute your shares or ownership.

Business Startup Grants

Where do Business Startup Grants Come From?

For the most part, business startup grants either come directly from, or are tied to, the UK government.

The government sees startups as an essential component to help develop the country’s economy. So, they provide support via hundreds of business grants on both a national and local level.

Additionally, some corporations and charities offer business startup grants to further their interests and industries.

Related: Government Start Up Loans » 

The 5 Types of Business StartUp Grants

In the UK, the 5 main types of business startup grants include:

  1. Innovation Grants
  2. Local Enterprice Partnerships (LEPs)
  3. The National Lottery Heritage Fund
  4. R&D Tax Credits
  5. The Prince's Trust

Let's look at each of these in more detail. 

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1. Innovation Grants

Developed to promote businesses that are creating new products or coming up with new ideas, cutting-edge research, and original ways of working, innovation grants are awarded by Innovate UK to many small businesses. Read our full guide to innovation grants »

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2. Local Enterprise Partnerships (LEPs)

These 36 organisations spread across the UK are voluntary partnerships between the local authority and businesses that can offer grant-level funding as well as other support for business startups. Though direct government support for LEPs ended in April 2024, the majority of LEPs continue to work on a local authority level to provide essential continued support for UK businesses.

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3. The National Lottery Heritage Fund

Grants awarded by the National Lottery Heritage Fund are available for businesses and non-profit organisations looking to work in the heritage sector, including the improvement of deprived areas, enhancing and sustaining nature, and investing in historic places and cultural traditions.

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4. R&D Tax Credits

A system of tax relief for businesses who undertake significant research and development projects for innovation in the UK, R&D tax credits are not a direct cash grant, but represent an additional area of funding of relief on tax burdens that gives businesses the financial flexibility needed to undertake comprehensive R&D programmes. Read our full guide to R&D tax credits »

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5. The Prince’s Trust

A long-established charity that has been helping young people for almost fifty years, the Prince’s Trust is soon to be renamed as the King’s Trust. The trust offers grants to entrepreneurs aged 18 to 30, to help them start and develop businesses in the UK.

Business Startup Grants

How to Apply for Business Startup Grants

Getting a business startup grant requires a level of seriousness. Grants are not unlimited, and each award is essentially a prize for which your business will be in competition with others.

It is essential that you present your business and your ideas in the best possible way to give yourself the greatest chance of winning the award.

When developing your application, you should spend time researching and understanding the qualifying criteria for the grant. As every grant is awarded for a purpose, it is key that your business and any project associated with the grant application definitively meets that criteria.

Grant applications can be time-consuming and that time is wasted if you know you will not pass this first hurdle.

Business Startup Grants

Application Tips

Write clearly and concisely, in good English. Be confident; show how your business meets the grant criteria, explain how the grant will be used if awarded, and define metrics on how success will be measured.

It’s important that you show that you are capable of delivering the results that make the grant a worthwhile investment into your startup business.

If developing the grant application worries you, it may be worth looking to the services of a professional grant writer, although of course the costs of this need to be considered against the value of your grant.

Business Startup Grants

Alternatives to a Business Startup Grant

A grant is not the only way to generate capital for your startup enterprise. You might want to also consider:

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1. Business Loans for Startup Businesses

There are a huge range of business loans in the market, many of which have been developed to help entrepreneurs launch their ideas. In addition to both standard secured and unsecured business loans, there is a government scheme to support startup businesses by providing guarantees on the loan, and in many cases preventing the need for a personal director’s guarantee.

Read our guide to start up funding to learn more.

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2. Investment Capital

Outside investment means diluting your company and sharing ownership with another, and for that reason often puts off passionate entrepreneurs.

However, venture capital can be a good way for startups to secure the money they need without worrying about loan repayments.

Business Startup Grants

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3. Crowdfunding

If your business idea would appeal to a large number of people, then crowdfunding is a good way to secure startup capital. However, be aware that successful crowdfunding campaigns take time and marketing expertise.

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4. Personal Investment

Many entrepreneurs are able to get their startups off the ground by using their own personal funds or asking for private investments from friends and family.

Business Startup Grants

Discussing Your Startup Funding with Experts

Stepping into the world of business startup grants alone can be overwhelming - it’s a huge arena with many options.

Thankfully, Clifton Private Finance are here for you. Our team of specialists can talk you through the range of business startup grants as well as offer advice on some of the many other financial products suitable for small businesses

Contact us today to discover how we can help you improve profitability and efficiency.

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