The main types of business grant available to your start-up

When most people think of grant, they think “free money” – and who doesn’t like free money? However, it’s a bit more complicated then that. There are lots of different grant options out there, and while some don’t offer wads of pure cash, they offer things that can be equally valuable for your business.

Direct grant

Direct grants are what most people think about when they think about grants – they’re sums of money awarded to you that you don’t have to pay back. However, often the amount granted needs to be matched by money you’ve raised yourself. Grants like this are also rarely offered as a general sum of money. They’re more likely to be awarded for a specific project, and to have conditions attached to their spend that limit what you’re able to do with it. And as you can expect, they’re very competitive. You might have more luck with a grant like this if you’re in a field where there’s generous funding available, such as environmental sciences or tech innovation.

Access to resources

If you’re running a small business, training or access to the resources that big corporations can afford can be difficult. But there are some schemes out there which make access to these resources easier and cheaper. For general enquiries and business advice on the spot, there are government-backed business support helplines available.

One leading programme is the Government’s Growth Voucher scheme. This gives businesses access to strategic business advice on everything from finance to marketing, and you can be selected for up to £2000 to put towards this. If you’re a smaller business (eg have 19 or less employees), the Growth Charter scheme might be more suitable and can provide valuable support, such as workshops and mentoring. Growth Accelerator is another programme helping businesses to develop, providing coaching and advice.

There is a government-funded Traineeship programme too, where employers take on a trainee (paid for by the government), which can help businesses who are struggling to afford staff, whilst also helping young people get into work.

There are many specific subsidies available when it comes to resources, such as Virgin Media Connection Vouchers. These give you money off superfast internet and waive installation charges, giving you improved connectivity and faster speeds – invaluable in developing your business.

Equity finance

Equity finance means winning investment in your business. This means you give away part of your ownership, as the investor will have a stake in your business. Winning investment can be difficult to small businesses and you’ll need to demonstrate consistent growth prediction – but there are government schemes available which provide tax relief for investors, making investing in your small business a more attractive prospect for them. One of these is the Enterprise Investment Scheme, designed to help small, higher-risk companies raise money by encouraging investors to buy shares.

Tax reliefs

There are numerous tax relief schemes out there to help small businesses manage their costs. One of these is the Employment Allowance – an initiative that can help employers reduce the National Insurance contributions they pay on their employees by up to £2000. You might end up with no National Insurance bill at all!

You can also get discounted business rates if you’re a small business. This is applicable if you own one premise and its rateable value is less than £12,000. Until 31st March 2015 you’ll get 100% business rate relief if the premises’ rateable value is £6,000 or less.

For a comprehensive list of tax reliefs and incentives, see here.

Soft loan

While technically not grants as you need to repay them, soft loans are often government-backed and can offer valuable non-financial support too. A soft loan is a business or personal loan, but one offered with more favourable interest rates, repayment options, or less stringent requirements. Traditional bank loans are not always a good fit for small businesses or won’t lend to them, and soft loans can provide access to finance and a more flexible way for them to pay the money back. They’re often government-backed schemes, and can offer other forms of business support. Virgin StartUp is one of these, offering a fixed interest rate of 6.17% APR Representative as well as a fantastic mentoring programme. Apply here!