Many start-ups and small businesses need a cash injection at some point in their journey, and one option is to apply for a small business grant. However, grants have strict eligibility criteria and are highly sought after, which means tough competition. So how do you apply? This article will cover the following points on how to get a small business grant:

  • What is a small business grant?
  • Why are grants difficult to get?
  • How to apply for a small business grant
  • Other funding options

What is a small business grant?

A grant is a lump sum given to a business for a specific purpose. This purpose can be simply for starting up the business or for informational reasons, such as research. Grants can be government backed, or from a private company or public organisation as well.

Grants do not have to be paid back to the donating organisation, unlike business loans. They can range from small totals (up to £1000) to large ones (up to £100,000 or more), depending on the purpose and type of grant. You can find a massive list of funding support on the government website, but there may also be private organisations offering funding to small businesses, so do your research.

To be eligible for a grant, your business will have to qualify against certain criteria. For example, some grants may only be available to start-ups, or only for established businesses that have secured their place in their market. A grant could also be based on your location or the market you sell to, so be careful to read the criteria carefully as it can be very strict.

Why are grants difficult to get?

Because of the ‘free’ aspect of the funding, and the limited amount of grants on offer, there is usually fierce competition when applying. 

In order to improve your chance of winning a grant, you need to have a strong business plan, or project plan, to show the organisation who are backing the funds. They will require proof that your business is sustainable and a detailed application to consider, so ensure you have a thorough and truthful business plan to show them. If information is found to be false, you could be asked to pay the grant back.

It takes time and patience to apply for grants, because the reviewing process can take a while. This could create money issues for your business if the wait delays the start of a project. But grants might not be paid until after a project has begun, so your business plan should prove that your cash flow is healthy and can cope until the grant is paid out. 

Sometimes a grant might only cover a portion of the costs for a start-up business or standalone project, so you may also need to provide proof of where the remaining funds will come from.

How to apply for a small business grant

Once you have identified the appropriate grant(s) for your small business, here are the steps you should take in the application process.

1) Read the application and criteria

First, read the criteria for the grant. If you don’t meet every item on the list then don’t apply. If the grant is only a portion of the total you need, and you can’t stump up the remainder of the funds, then don’t apply. 

Next, read through the application thoroughly to find out what documents and figures you need to gather, to prevent you getting stuck halfway through. 

2) Set aside enough time

The applications can be lengthy and you may have to interrupt it to collect documents and evidence to support the application. So give yourself a lot of time to make the application as strong as possible, and don’t do it in a last-minute rush.

3) Consider your business objectives

Use your business objectives to guide your application. Grant donors will want to understand why you want the grant, as well as what you need it for.

4) Get expert advice

Often your accountant will be able to support your business with grant applications. They may hunt for any applicable grants, and even fill out the applications with you. Using a consultant can help you identify areas of the application that can be strengthened, to give you a better chance of approval.

5) Use evidence

Update your business plan and ensure any supporting financial documents are up to date with realistic figures in any projections. Don’t try to impress with figures that are ambitious, because you may have to pay back the grant if they are found to be false.

Once you’ve pulled together the application, proofread it. Don’t let simple spelling mistakes ruin your chances of securing the small business grant. Submit the application early, too, in order to have a better chance of securing the grant before the funds are allocated to other businesses.

Other funding options

If your grant application is unsuccessful, there are other options for your small business to get some money.

You can apply for a government backed start-up loan if you are in your first two years of trading. You can find out more over on the government website. Bank loans are available too, and will rarely be affected by how long you have been in business, as is the case with the government option.

You may want to pursue a private investor or a capital investment firm. You can find out about how to present your business plan to investors here to improve your chances of securing investment for your small business.

How Countingup can simplify your finances

Now that you are informed on how to get a small business grant, let Countingup help you run your business by saving you time on financial admin. 

You can download the Countingup app and make your bookkeeping easy by trying the business current account with built-in accounting software today.  

Countingup enables you to create invoices in seconds, automates expense categorisation and gives you live business insights with a running profit and loss report. Start saving hours of accounting admin with the app – time you could be spending on applying for grants! Find out more here.

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