Getting Started
Government grants: Everything you'll need to know
Back to NewsYou may have arrived here because you are looking for more information in relation to the financial support that the government currently offers in the form of grants and other financial support. If you want to find further details in relation to what you and your business are eligible for then head to Find Government grants.
We are a proud National Business Support Part of the Start Up Loan programme which provides government backed unsecured personal loans that can be used for business purposes. So, if you have been trading for less than 36 months, than you may want to consider taking out a Start Up Loan.
One option to help fund your business is to try for a government grant. However, with over a thousand grants to choose from, where do you even start? This guide helps to break it down.
What is a government grant?
A grant is a sum of money awarded to your business from the government that you don’t have to pay back. It’s awarded to your business to assist in its development, often for a specific purpose.
Is it right for my business?
The pros of a government grant include that it’s non-repayable – you don’t have to return the money, or pay interest on it. You’re also not giving away equity in your business, as when winning investment.
However, there are some really important things to consider.
- The process of applying can be incredibly time-consuming and complicated; can you afford to sacrifice this time?
- Grants and awards are very competitive, so if you’re banking on winning one to develop your business idea, it’s likely best to have a plan B
- Often criteria for the grants can be very niche; this can make it difficult to find one that you’re eligible for, and lead to you tweaking your idea. While changing your business isn’t necessarily a bad thing, if you’re doing it just to win the grant, you should maybe think twice
- A grant is unlikely to cover all your costs, and you might be expected to match the grant with your own funding
- Grants often come with conditions which state how you’re allowed to spend or allocate the money – so be aware that it might not be as simple as just receiving a lump sum.
- Grants are rarely allocated for just ‘starting a business’ – they will always be to contribute to a specific project or aim.
Best areas for winning grants
There are some areas where grants are more readily available than others – does your business fit into one of these areas?
Energy and environment
With improving the world around us and saving energy a priority, there are schemes available for businesses creating products that will help save the world. There are also grants available to businesses that seek to become more environmentally-friendly, even for such small changes as improving insulation in your premises or office. Search for green grants here to find out more about what’s on offer.
Exports
Improving trade links for the UK’s businesses is a key element to driving the economic recovery, so if you’ve been thinking of exporting there’s useful help from the Department of Business & Trade (formerly UK Trade & Investment) to help get you off the ground.
Innovation
It’s a no-brainer really – to keep the UK competitive in a rapidly-evolving global tech market, we need to encourage the most innovative businesses to keep inventing. There are some fantastic opportunities out there for exciting tech businesses, so check out Innovate UK (which supports innovative UK businesses to realise the potential of new technologies, develop ideas and make them a commercial success) for up-to-date listings of the best opportunities.
What do you need to apply for a government grant?
Every grant will have different requirements, but you’ll always need:
- A business plan. Crucial for the body granting your loan to assess your business and see how the money will help you achieve your aims, a great business plan will help you stand out in the competitive world of winning grants and give you the best chance of being chosen. You should tailor your business plan to each grant application, the way you would a CV when applying for a job.
- An idea of how the money will be spent. You don’t have to know how every single penny will be spent, or to have the exact costs of everything, but you’ll need to have an idea of where the money will go. Research in advance as to where the hypothetical budget would go, and note allocate rough amounts. For example, if the grant is to help towards the marketing costs of a new campaign, you could set aside £200 for social media ads, £500 for Google Pay Per Click, £400 for real-life printing and distribution costs…you get the idea. Try and be as detailed as possible – again, this will give you a strong case for being selected.
Check your eligibility
Whether or not you are eligible for a grant will depend on various factors, such as:
- Business size and classification. The grant might only be available to a Limited Company, for example, or to a business with a certain amount of employees.
- Grant purpose. Do you have a clear idea of what the grant will be used for?
- Location. There will be regional grants available. Bear in mind that different locations are likely to be more competitive than others, such as London.
- Industry type. Many grants are industry-specific.
If you can, worth reaching out to speak to someone to sense check eligibility before spending all the time applying.
It’s not just money
When people think of grants they automatically think of FREE CASH. But, there are many non-cash grants available that can help your business. There is also a great article from January 2024 here on over 150 small business grants in the UK, some of which are non-cash.
We also suggest you contact your local Council, to see what local support they may be able to offer, along with Umi’s SatNav for business platform.
Finding grants and support
With literally hundreds of grants out there, how can you find the right one for you? A good place to start is the government’s own portal for finding finance and support for your business. This will help you filter by business size, industry, and the kind of support you’re interested in, showing UK-wide options.
The British Business Bank’s website is also worth checking out, as they support businesses UK-wide with funding and support via various partners (of which Virgin StartUp is one).
Lastly, websites like GrantTree and Grantify have lots of helpful information on grants and you may choose to pay them to support you with an application, We have no affiliation with them and that is totally at your own discretion.
And don’t forget that while we’re not a government grant, the Virgin StartUp Loans scheme is one backed by the government, allowing us to offer lower interest than many business loans on the market, with the funding also coming with lots of expert business advice and mentoring to help set you up to succeed.
You can find out more and apply for a Start Up Loan with Virgin StartUp here.
[It may also be useful to link to the regular VSU x funding options webinar [+ the Virgin Money guide and funding and investment], but you’ll likely think not a good idea, so feel free to disregard, no prob.]