How to know if a grant is right for you and your business
Grants can be a huge help to businesses starting out. As well as not needing to be paid back, the kudos of being supported by a governmental or business body can help boost your confidence and your reputation.
However, as with anything, sometimes things can be a bit too good to be true. While you might initially think FREE MONEY!, a little digging might reveal that you need to match the amount with your own money, or that you can only use the money for a certain thing, or that your business isn’t even eligible.
However, there’s no denying that grants can be really helpful to some businesses. Here’s a guide to knowing whether a grant is the right option for you.
What is a grant?
There’s a really bewildering array of grants out there – it’s impossible to count, but at any time there’s likely to be several thousand, offered by a variety of sources. This government resource can help you find one that's right for you.
Put simply, grants are non-repayable sums given to a business, usually towards a specific project or to be used for a specific cause. They can also take the form of vouchers or subsidies for elements such as training or marketing.
To find out more about the different grants on offer, click here.
How much funding is available?
Some fields, such as the arts, have seen big funding cuts in recent years and so competition for grants has never been more fierce. Others, such as renewable energy, are seen as priorities and so there is more money available, and potentially less competition. If elements such as innovation, tech and sustainably are key priorities for your business, grants could be a good option for you.
Another factor is where in the country you are. London has many grants on offer, but there’s also a lot of competition. However the government is actively investing in some areas of the UK, such as TechNorth in the north of England, and so while areas outside London might have fewer grants they can potentially be less competitive.
Do you have time to apply?
Grants are very competitive – something about free, non-repayable money and access to resources gets cash-strapped businesses really excited. However, this does mean you have to make an important decision: does the time you’ll spend making your application fantastic balance out against the likelihood of being selected for a loan?
What the bodies giving grants will ask for will differ from organisation to organisation, but there will be three things you’ll almost definitely have to provide: a business plan, a proposal for how the money will be used, and a financial plan demonstrating this use. The plan doesn’t need to account for every single penny, but it does need to give a reasonable idea of what the money will do, and show that you understand how to get the most out of it.
Creating these grant applications will take time, as each one will need to be personalised to the grant you’re applying for. Be honest about how well-suited your business is to the grant, as otherwise there’s no point in spending the time applying for it – you can use that time elsewhere. Make sure that your business meets all the criteria (size, location, industry, conditions) and don’t wilfully ignore guidelines such as these in the hope they’ll be overlooked due to your dazzling business – they won’t.
What conditions are you willing to work under?
Grants generally come with conditions that state how the money needs to be used. This could be anything from only allowing the money to be spent on a new project, stipulating that a certain percentage needs to go towards a specific cost (eg project outcome rather than living costs), or asking you to use part of your working time and grant money towards something that benefits the wider public, such as providing a workshop.
Before applying for a grant, think about how these conditions will impact the benefit you’ll get out of it. If you need the money for something completely different and the grant money won’t be able to be put towards it, even if you do win the funding it will essentially be useless.
Are you able to match the funding?
It’s rare that a grant is able to be the only source of funding for a project. If you win a grant you often have to match the same amount with your own funds, and grants tend to be smaller amounts too. Think about where the rest of your funding will come from. Options include your own savings, investment, a Virgin StartUp loan or crowd-funding.
All ways of raising the additional funding come with their own demands too, so think carefully about how this will impact upon your resources and timescale.