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Starting up a business can be as nerve-wracking as it is exciting. One of the greatest considerations is going to be raising capital and a desire to not get the business into too much debt in the very first days of its life will be strong.
While many financial options exist to help a young business get off the ground, only grants offer that debt free way to get the funding you need. But what are business start-up grants and can anyone get them? Read our guide to find out more.
What Makes a Business Grant Different from a Loan?
The fundamental difference between a grant and other types of business funding is that a grant doesn’t have to be paid back. For people new to the world of business finance, the idea that money is given away for free can seem counter-intuitive.
Why, after all, would organisations want to give you money for free?
Despite the fact that you may feel the contrary and have a “me against the world” mindset at times regarding starting up your business, people will want your company to succeed.
The UK government wants to promote the growth of new businesses because strong new companies create employment and opportunity, generate wealth, and ultimately improve Britain’s value on the world stage – it is in their interest for you to do well.
Local authorities have as similar vested interest as new businesses in the area lower local unemployment, bring in investment from outside, help urban regeneration and more.
Successful corporations in the same field see tangible value in helping boost smaller companies, while various charities may simply want to lend a hand.
There are, therefore, many organisations who have a strong desire to help you start your enterprise.
Is it Easy to Get a Grant? – Understanding the Competitive Nature of Grants
Grant money is limited. No body, no matter how sizeable, is able to simply hand out infinite funds to help every startup out there.
Consequently, obtaining a grant is a competitive process – you will need to do everything you can to stand out from the crowd and must understand that applying for a grant is no guarantee of its being awarded to you.
However, that doesn’t mean that it is too difficult to get a grant. If you meet the criteria for the award and present your business in its finest light, there’s every chance you could get the financing you need to proceed.
The Scope of Small Business Start-Up Grants
Grants for small businesses come in all sorts of shapes and sizes. In addition to pure start-up capital, grants are available for many of the following:
– creating a business plan
– aid with training
– cost of specialist software
– research and development
– investing in equipment
– exporting to new markets
In addition, grants are often earmarked for entrepreneurs in specific sectors or those who are part of a particular demographic. Some examples include grants for:
– Young entrepreneurs
– Female business leaders
– Those in the agriculture sector
– Technology innovation
– Environmental and climate centric businesses
When looking at a small business grant, consider the wider scope of your business in order to maximise the opportunities available to your company.
Finding the Right Grant for Your Start-Up
Though there are many grants available, it is likely that only a few meet the needs of your fledgling business. It is important that in your researching, you eliminate grants that aren’t directly relevant – doing so avoids a considerable amount of wasted time.
It is not enough to simply check the grant’s eligibility criteria and consider it viable assuming that you meet these qualifications; no, care must be taken to ascertain whether or not the grant actually suits your needs.
Some, for example, may come with limitations that are inflexible and do not sit well with the work you are doing. Applying for a grant is a time-consuming process, so wasting time on those that don’t truly fit is an expensive mistake.
For many starting entrepreneurs, the desire to get a grant – any grant – often outweighs the sense in the selection, and they can suffer because of such short sightedness.
It is also important to not reject other available help or support merely because it isn’t a direct grant.
For example, many organisations will offer training help, free advice seminars, or even personal consultation for no charge – these non-capital alternatives should be considered as valuable as any grant.
The experience of others who have tread the path before you is often worth more than mere cash.
One additional trap that is important not to fall into, is taking out loans that are thinly disguised as grants. Remember, a true grant has no burden to be repaid at any point, so check the fine print and make sure the grant you are applying for is not a wolf in sheep’s clothing.
Finding and Applying for a Small Business Grant
Here at Cashflow Solutions, we have written a comprehensive guide to Small Business Grants, an article that contains advice for selecting and obtaining grants at all stages of a small business’s life.
We strongly recommend reading that guide for greater understanding of the range of grants available, help in finding relevant grants, and a detailed look at the application process.
Alternatives to Business Start-Up Grants
If you are looking for capital to begin a business, then Cashflow Solutions is here for you.
Our experts are on hand to discuss several different ways to get the money you need, including specialised loans for small businesses, asset finance, investor opportunities and, of course, a full understanding of the many grants available.
We have the years of experience you need to help get your business started smoothly – why not contact us today to understand the options available to you?
Working in partnership with our lending partners backed by the British Business Bank to deploy funds to support business growth and working capital
