It’s estimated that is around £5 billion worth of grants and programmes of support that you can tap in to. But actually getting your hands on the help and money is not easy. You will find obstacles in the form of competition for limited monies, strict criteria that must be met as well as the fact the schemes are constantly changing and expiring.

HURDLES

Noone is going to knock on your door to offer money – you have to go and get it. And you need to know that Government grants are normally for projects that are at the planning stage. If you’ve already started on the new idea it’ll be too late. Each programme will have it’s own strict terms and conditions that apply to all applicants. These govern, for example, the use of the monies, what happens if the business stops trading, and if repayments are due, when they are to be paid. Recipients of the help can expect to face demands for immediate repayment if the rules aren’t followed. Like a bank on the high street who insists on commitment before it’ll lend, so the providers may well require proof of your commitment. You may only get part of the money you need – the organisation behind the assistance expect you to be able to match its commitment with your own money. Consider it a test – if you aren’t prepared to stump up some money, why should the public purse give you any? The proportion you get will vary according the funding programme and as for the difference, that be up to you to source from places such as a loan, an issue of shares or from a new investor.

SOURCES

Grants and assistance programmes are made available by the Government through the various departments, the European Union, various Regional Development Agencies through out the UK, local authorities, local development agencies, Business Links, Chambers of Commerce and County Enterprise Boards. There is also some funding is also distributed through colleges and the Learning and Skills Council.

TYPES OF GRANT

There are numerous types of grant available:

1. Direct grant – cash for a given project;

2. Repayable grant – monies given are to be repaid from future revenues;

3. Soft loan – better terms and interest compared to the high street;

4. Equity finance – where the provider gives money in exchange for shares that they can sell at a profit later;

5. Free or subsidised consultancy;

6. Access to resources – where the business can access publicly owned facilities;

7. Technology transfer – where the business gets help in taking the development to market;

8. Best practice transfer - where the business is helped to improve its standards;

9. Shared cost contract – where businesses are helped to group together to split the costs of projects;

10. Subsidies – where approved products / services are subsidised;

11. Advice and information;

12. Packaged assistance – where some of the help above isn’t delivered singly, but as a package;

13. And competitive awards schemes – a chance to score PR plaudits by winning an award.

Of these, the grants are channeled in various ways. Some encourage investment in innovation, research and development; and some are there to specifically help small businesses. Others help with training and skills through the Learning and Skills Council as well as the Business Links. If you want to employ New Deal candidates or training of young people you may be able to get help Jobcentre Plus. Age and inexperience needn’t be a bar to getting help. Indeed, assistance and funds are available from The Princes Trust to those who may be unemployed, or employed in a part-time or low-paid job, are aged 18- 30 and have a business idea. The whole ethos behind the giving of grants is to stimulate business activity and this is the reason why a business based in an ‘assisted area’ may be able to get extra grants if they can help with regional development, urban regeneration or an improvement in local employment prospects.

FIND THE GRANTS

As you can imagine, the growth of the internet has made it much easier to find out what is available online. You can find out much of the information for nothing. However, some information is chargeable. Through the Business Links website you can search through the Grants and Support Directory for nothing. Spending some time will reveal that there are all told several thousand programmes available, at all levels – national and local - depending on what you want, where you are and so on. But there are private sector agencies that provide information on available grants and can give assistance in applying for them. However, it is worthwhile searching online and comparing a few different agencies. Many of them charge a fee or subscription for some or all of their services but remember, none of them can guarantee success in getting funding for you. To find them, just google "support and grants". When dealing with any organisation that seeks payment for its services, check the what they offer, the charges involved, the money you are seeking, the type of project you need money for as well as their track record. But why would you want to pay for advice? They can probably find the appropriate programme for you, and faster too. A good consultancy should be able to help with the technicalities of the application.

THE APPLICATION PROCESS

Assuming that you have gone through the process of finding the grant you want to apply for, and making sure you qualify, you will want to make your proposal. But before you do, it might be worth making personal contact with the provider – you might pick up some tips. Remembering that you may have to put some of your own money up, you need to be able to show the specific purpose for the grant. Don't start work before you’ve been given the green light on funding – you’ll disbar yourself if you do. Also, heed any deadlines that you’ve been given. If you need any advice when preparing your proposal, consider speaking to an advisor at a Business Link. They’ll have more experience and will know how to create the proposal.

YOUR PROPOSAL

Now comes that hard work. You are going to have to provide a detailed description of the reason for the application; give an explanation of the benefits of the project; detail the plan and provide full financial data; provide details of your own experience and that of your (senior) colleagues; complete the application form; and submit a business plan - your accountant should be able to help with this. Upon submission your application will be judged according to its significance, approach, innovation, your expertise as well as the need for the grant. It’s worth remembering that the decision is not always quick – it could take many months to come. The more ‘localised’ the body, the faster will be the decision as they are smaller and have less bureaucracy.

YOU’VE BEEN REJECTED

Rather like a driving test, many fail with their application the first time around. By asking the organisation concerned why you’ve been rejected will help you when you re-apply. Typically the reasons why applications are turned down include the failure to prove the need for the money; providing out of date information; a failure to show that own funds are available; the plan was poorly written and produced; failing to show how research will become a concrete working business; any facts quoted are fanciful or unbacked; failing to show the importance of receiving funding; and that the application has been made to the wrong organisation.

If you cannot get a grant, you may have to resort to other forms of finance such as the traditional bank loan. Alternatively, you may want to consider selling shares in your business.

With a time and planning – as well as the appropriate idea – there is no reason why you shouldn’t get what you want.

GRANT ELIGIBILITY

Naturally with public monies that are on hand as cash or support, there needs to be a series of criteria to be met before awards can be made.

Your location counts. Through regional economic variations, social and financial needs, businesses in some parts of the UK get extra grants. Further, to attract businesses or maintain employment in the local economy, some local authorities offer their own grants.

The size of your business in terms of either number of employees or turnover, may have a bearing on eligibility. A lot of grants are deliberately limited to small or medium-sized enterprises - those with fewer than 250 employees.

It shouldn’t be a surprise to know that Government and local authorities wish to encourage certain industry sectors whilst they feel others do not need any assistance. Also, the European Commission places limits and checks on the help that some sectors receive.

Lastly, the awarding body may place restrictions on the use of the grant. Grants are invariably awarded for a specific purpose such as buying plant and equipment, improving working accommodation or developing export markets. Other uses will be barred.

Each grant or help provider will have it’s own criteria, so don’t assume that because you’ve been rejected by one provider, that you are barred from others.

CONTACTS

• Learning and Skills Council - http://www.lsc.gov.uk/

• To find your your local Business Link – Call 0845 600 9006 or see www.businesslink.gov.uk  Note that the southern Business Links are in the process of being reorganised.

• New Deal - www.jobcentreplus.gov.uk

• Princes Trust - www.princes-trust.org.uk

• DTI regional investment - www.innovation.gov.uk

• Grants and Support Directory - www.businesslink.gov.uk

• Third party advice such as - www.is4profit.com

• www.dti.gov.uk  

• www.dfes.gov.uk

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