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Government grants for start ups

There are hundreds of government grants available for small businesses – which could save you money, lower start up costs and help grow your business. Read our guide to finding a government grant for your new business.

Government grants for new businesses in the UK cover a range of awards – from saving money on premises opens in new window and rates, through to buying cheaper plant or IT equipment opens in new window.

Grants come in a number of forms, with over 100 government grants for small businesses available across the UK.

While there are lots of grants available, getting a small business grant from the government can be a challenge.

Government grants are often complex with lots of processes and stages, and each grant will have its own requirements and criteria for applying opens in new window.

Most small business grants are awarded to help launch a start-up or new business opens in new window, with the aim to generate jobs and stimulate the economy.

There are fewer grants available for more established businesses.

Here’s our guide to applying for a government grant for a new business.


Making business finance work for you

Starting a business doesn’t come with a set of instructions.

We know that understanding the many different types of financial product in the marketplace can be difficult.

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.

Download your free copy


1. Where to find government grants for new businesses

Government grants are available for UK businesses, as well as via the Welsh and Northern Ireland Assemblies, and from the Scottish Parliament.

If you’re starting a UK business, begin with the useful Business Finance Support Finder opens in new window.

The Welsh government has access to a similar list of grants at its  Business Grants opens in new window website.

Enterprise Ireland opens in new window has access to funding for small businesses up to larger enterprises, while the Scottish government’s Funding Opportunities opens in new window website provides access to over 600 grants and funding options.


2. What type of new business grants are available?

Government grants are available in all kinds of forms – from reduced costs and free equipment, to cash awards to help your new business grow.

Generally, government grants come in the form of a direct grant.

Direct grant – this is money given to your new business to cover start-up essentials such as training, investment in equipment, or reaching new markets such as overseas exports opens in new window. Some grants will expect your business to provide 50% of the value of the grant, but funds of up to £500,000 are available depending on your business sector.


Alternatives to business grants

Business grants may not always be available or suitable for your business.

But the good news is that there are alternatives to business grants out there, such as:

  • Equity finance – This is when you sell a share of your business in return for finance. Some equity finance schemes opens in new window, such as the Seed Enterprise Investment Scheme opens in new window, offer up to a 50% reduction in income tax on investments made in new businesses up to £100,000. Businesses have to be less than two years old and have fewer than 25 employees.
  • LoansLoans opens in new window with lower interest rates and generous terms than can be found via other lending routes. Backed by the government, the Start Up Loans scheme opens in new window offers personal loans of up to £25,000 with a 6% interest rate and access to free business support and mentoring.
  • Purchase order finance – This financing option allows businesses to pay their supplier’s upfront costs before receiving payment for an order, ensuring a smooth delivery process. Unlike other types of funding, Purchase order finance opens in new window is available to businesses of all sizes, including new startups and small businesses.
  • Trade credit – This type of short-term, unsecured debt allows a business to borrow goods or equipment from a supplier with an agreed-upon deadline for repayment. One of the best things about trade credit opens in new window is that it’s usually interest-free meaning that  you only have to pay back the value of the goods you purchased without any extra fees.


3. How do I apply for a government business grant?

Each scheme is different, but check you meet the general terms and criteria before you get too far into the application process.

Most grants are very specialist, such as creating a specific type of business or building a business that will help regenerate a local community.

Here are some tips you may wish to consider if applying for a new business grant.

Talk to the grant body – talk to the grant awards body to assess your chances of making a successful application.

• Read the grant objectives – take time to learn why this grant is being awarded and what it aims to achieve, such as hiring staff from a local community or developing environmentally friendly products. Write your application referring to the objectives as closely as possible to stand the best chance.

Have a great business plan – as with other types of funding, the awards body for the grant will expect to see a professional business plan and, if you’ve started trading, examples of your business position and balance sheet.

Focus on the grant use – grants are usually awarded for a specific project, such as buying IT equipment or funding broadband installation. Use the application to show how this will help grow your business and benefit others, rather than on the (in this case) IT equipment itself.

Check your funding – most grants will look to match the amount you’re willing to invest, so if you’re seeking a grant of £10,000 then make sure you’ve a matching amount available.

Start applying early – you’ve a better chance of receiving a grant if you apply when a scheme first launches. Grants may have a limited pot of money to invest – early on, there’s simply more funding available and less competition to get it.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free  Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.


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