There are a great number of grants available if your business fits the criteria.
A good starting point is to engage the services of an expert. The main issue with grants is that they appear and disappear in quick succession and the criteria for each grant can be difficult to meet.
As with all types of financial applications, a business plan should be at the centre of the negotiations. The business plan will need to be tailored to ensure the emphasis is on the specific project that the grant is intended to cover.
Grants are usually for projects that have not started and restrictions are often imposed. For example, the project must help the objectives of the grant provider or your business must demonstrate that the project is not viable without the grant.
As with other types of finance, it is also important to show your commitment by detailing how much money you have placed in the project, or how much you will be investing once the project is underway. Only in the rarest circumstances will a business receive 100% funding for a project. Also, detailing the management structure you have in place will improve your chances of obtaining funding.
As the nature and availability of grants is constantly changing, it is not possible to show a complete list. For investments, there are regional grants available for capital investment and job creation, and gaining funding may depend on where your business is based. These types of grants often include disadvantaged areas. Other types of regional support may include subsidised rent and rates in particular areas.
There are a whole host of grants and schemes available to encourage research and development (R&D) activities. There is a comprehensive list of grants available through the Department for Business, Innovation and Skills. In addition to grants there are certain capital allowances available for businesses that carry out R&D.
These grants recognise that reducing environmental impact is an additional burden on businesses. Within this bracket are grants for developing energy and environmental products. There are also grants available for new buildings or existing buildings that can be made more energy-efficient.
There are a number of support grants for business wishing to export outside the European Union.
There are criteria to fulfil and the areas covered include:
It is typical to obtain this type of finance when you are looking for between 15% and 60% of the cost of a project.
Grants are usually available for specific projects, for example a new product or process, job creation or training programme. The normal growth of a business would therefore not normally qualify for a grant, though an established business looking at creating more jobs could qualify.
There are three main direct costs that need to be considered when trying to obtain funding:
Much of the initial cost will be incurred by the preparatory work. This would include grooming the company, obtaining key staff, having the right management structure in place and ensuring there is a business plan.
Legal fees will vary depending on if other services are provided, the complexity of the business, its size and risk to the lender. Legal costs will also depend on the stage of your business. For example, if you are established, the grant funder may instruct a due diligence exercise prior to investing.
Fees for the preparation of management accounts will vary depending on whether other services are provided - bookkeeping, for example. The complexity of the business, its size and the frequency of issue will also have an impact.
The designated supplier is the preferred supplier to be used by the grant receiver and will form part of the agreement. Using the designated supplier may be an additional cost to the business or a saving, depending on whether it is more or less expensive than an external supplier.
Another cost is maintaining the restrictions the grant funder may impose. There will be a certain point in time when your business will have to show compliance with the conditions of the grant.
The timeframe for arranging finance from a grant funder will vary, depending on the stage of readiness of the business.
It is difficult to estimate a timeframe, although it is common for this type of finance to take more than three months to organise.
Timings will also depend on whether new security, new valuations or legal advice are required.
The right finance for your business section gives examples of financial structures that are suitable for different trading types and sizes of business.