Government grants are growing in popularity; with funding available for a range of projects and in different geographic areas, small businesses no longer have to feel limited by traditional ways of raising capital. Applying for a Government grant is easy and can be very cost-effective.
What are Government grants?
Government grants are small bursaries provided by the Government to companies that fit certain eligibility criteria. They are offered on favourable repayment terms – often a gift with no repayment required. Unlike other forms of financing, grants are typically provided for a specific project, and must be matched in value by an investment by the business owners. For more information on what Government grants are and how many are available, please read our guide to small business grants.
Preparation before you apply
Applying for a Government grant is similar to seeking private investment so you’ll have to make a convincing business case. Initially, you’ll need to be ready to match the grant with your own money as most are awarded conditional on you doing so. You’ll also need to work out precisely why you need the grant as they won’t be awarded for less than clear objectives.
Seek professional advice from a local business adviser to help you prepare your case. You’ll need to provide the following to the appropriate awarding bodies.
- Project description
- Social and financial benefits of the project
- Full financial breakdown of the project
- An up-to-date business plan
- Evidence of business acumen amongst the company directors
- Application forms as required
Don’t apply when you’re desperate for capital – applications can take several weeks to a year to be accepted although those run by local Government will typically have a reduced lead time.
How to apply
Contact your local Business Link to find out precisely what grants are available and which one you wish to apply for. You’ll then need to acquire the necessary application forms from the Government department responsible for awarding your grant. Make sure these are filled in legibly and include any requested documentation. Make you follow instructions to the letter; grants are extremely competitive.
If you get rejected don’t let it dishearten; getting a grant is difficult due to the restrictive eligibility criteria and extreme competition. However there are reasons why grant applications are turned down; make sure you ask for feedback so you can improve your application the next time round. Here are some common reasons for having your grant application rejected:
- You don’t fit into the eligibility criteria required for the grant e.g. you don’t live in the right geographic area or operate in the wrong industry
- You haven’t effectively demonstrated how your project will yield social and financial benefits to the local community
- You awarding institution is not convinced you’ll match the grant with your own funds and use the funds in the appropriate way
- Your business plan or costing breakdown is unrealistic or unclear
If you have applied multiple times and find you can’t get a grant, take a look at our guide to sources of start-up finance for alternative options available to you.