Winning a government grant can be a real boon for SMEs looking for funding, technology or expertise. In this post, we will discuss everything an SME needs to know about such grants.

Running a successful business is all about pre-empting, overcoming – and, at times – walking around hurdles. These hurdles come in every shape and size you can think of – from HR and compliance to marketing and branding. But if there’s one common denominator among all the problems businesses face, it has to be the money.

Take funding, for example. SMEs around the world and across the board are known to struggle when it comes to raising money. SMEs in the UK are no exceptions to this. In fact, so difficult is raising money via traditional, mainstream and high-street lenders that SMEs have gradually started thinking beyond banks and towards alternative funding channels.

In such times, the role played by the government becomes more crucial than ever. Government grants are, without a doubt, the face of this role. This is the reason why understanding how these grants work and how your SME can give itself a good shot at winning one are important. In this post, we will try to cover what government grants for SMEs are, how they work and how to find and apply for a grant that is suitable for your business.

What is a Government Grant?

A government grant is essentially an incentive package made available by various government bodies and organisations to individuals as well as businesses. Government grants (barring the finance grants) are usually non-repayable.

Depending upon the nature of the grant body and the grant objective, these grants can come in a variety of sizes and formats. As far as small businesses are concerned, such grants range from £1,000 to £500,000. Some of the bigger and more prized grants can go even higher.

Why Are Grants Given to SMEs?

Government grants have been there for a long, long time. The names and forms they have taken may have changed over time – from business subsidies to business support – but the objectives haven’t. If you were to analyse government grants across business sectors and districts, two things become very clear:

Most government grants have a singular objective – to keep the economy growing. This objective takes many avatars such as employment generation, sectoral development, regional development and so on. Grants that have these objectives are more or less permanent fixtures.
Other grants aim to follow, aid and complement ongoing policies of the government. Such grants typically reflect the incumbent government’s views in regard with trade, environment, social welfare, technology etc.

To put things in a more sweeping perspective, we can say that government grants have three clear objectives:

Boost economy through regional and local development
Generate employment by supporting businesses
Create an economic environment that encourages innovation, entrepreneurship and ‘home-grown’ research

Why SMEs Should Take Government Grants More Seriously

Even though government grants are incredibly appealing, very few SMEs actually realise the potential of such grants. Here are some features of government grants that SMEs can’t afford to overlook:

Government grants are diverse: Very specific grants are available across all business sectors. This allows SMEs to compete more fairly for similar grants.

Grants are more than just money: As we will discuss in the next part of this post, government grants offer much more than just money.

Winning a grant validates your business idea: A large number of SMEs are stuck in the validation loop that stops them from expanding or trading more confidently. Inadequate funding makes matters even worse. A grant can be a good way to turn the corner in such times and receive external recognition and validation.

Government Grants: Shortcomings & Drawbacks

While the features associated with government grants are certainly attractive, there exist shortcomings and drawbacks you should be aware of:

The competition is fierce: The competition for government grants is fierce to say the least. Since young businesses, start-ups and established businesses all tend to spill over into the space that’s reserved for SMEs, the competition can become entirely off-putting.

It can take months before you see the money: Applying for a government grant isn’t always the smoothest of processes. It can take many months for the assessment process to conclude, making grants irrelevant for businesses that require urgent funding.

Grants can never replace external funding: Given their limitations in size and scope, government grants cannot replace external, third-party funding channels – not in the long run, anyway.

Top Grants

Apprentice Levy Transfer Scheme

If you're an organisation with a payroll of more than £3m, you'll pay the Apprenticeship Levy. Find out more about the Apprenticeship Levy on GOV.UK.

Essex has an Apprenticeship Levy Transfer Service where you can gift and receive levy to support businesses to recruit apprentices.

If you would like to use some of your levy to support other employers in Essex take on an apprentice - you can now gift up to 25% of your levy.

Design Foundations

Design Foundations is a new programme for grant-funding funded by Innovate UK which is designed to help businesses identify and source high-value innovation opportunities and develop better products and services and ascertain the correct business model.

The purpose of the fund helps businesses explore options in conjunction with a design team which will help to bring new approaches and ideas to the table for each business. The fund offers up to 70% of the funding for projects of £100,000 for businesses regardless of age, size or sector. The funding platform has 3 different rounds of funding so there are plenty of opportunities.

Businesses can be helped in a variety of ways through this funding, primarily to find and address the problems they have, and explore new ideas without company capital being sunk into potentially risky new ventures.

The design fund helps by identifying viable avenues for market which includes a whole range of multi-sector opportunities. It provides to option to bring potential buyers in for new products and providing a first-hand design process, embedding key learning strategies and understanding potential new strands for growth.

Businesses who are looking for potentially new avenues and ways to troubleshoot their sector performance will find this fund excellent. The Innovate UK process is a smooth application process and allows the high-risk prospects of new revenue streams and innovation to be funded where other conventional funders would not support.

Power to Change Community Business Fund

Power to Change is an independent charity which has been created to support businesses within the community in East England. The purpose and leading core message is that community businesses have a focus on building stronger, more successful communities and should be supported.

Eligibility is assessed on eleven key points within the application, the first is that your business, must be a community business. What that means is, a business set up to deal with a local issue within the community. This applies to a great many businesses, but one of the things which they have in common is that they are accountable to their local community and often proceeds flow back into the community. Businesses must be incorporated and share the purpose of the Power to Change fund. Crucial to your application is the filing of one year of accounts which will be evidence to the business’ running. Applicants should also be aware that Power to Change requires you to have additional funding in place as they will not provide the entirety of a business’ funding. Grants are available between £50,000 and £300,000. Projects who gain funding from the Power to Change fund should be ready to start their projects within the first 6 months of gaining funding.

Low Carbon Workspace Grant

Low Carbon Workspaces offers small and medium-sized businesses in Buckinghamshire, Bedfordshire, Berkshire, Hertfordshire, Northamptonshire and Milton Keynes grants of between £1,000 and £5,000 to cover up to a third of the cost of making energy improvements.

The programme is funded by the European Regional Development Fund (ERDF) and managed by Ngage Solutions, a not-for-profit company that specialises in the design and delivery of grant schemes and business support programmes.

Find out more

Do It Award

Administered by UnLtd, who also give out the Grow It Award..

Do It will help you start your social enterprise. Alongside giving you £5,000 to build your social venture, they’ll give you access to training and events, and assign you a dedicated award manager (an expert in helping social entrepreneurs to start and grow). The award manager will be there to coach you and support you to achieve your goals.

Find out more

Fantastic Services £5,000 (Re)start grant

Home services franchisor, Fantastic Services, has a programme offering up to £1m worth of cash grants to enable 200 people to start up their own business within the domestic service industry.

The scheme is open to applicants in all parts of the UK, with more expected to be issued in London and the south east where demand for these services has grown over the pandemic.

Each grant is worth up to £5,000 and will go towards initial business start-up costs in addition to the training programme to help grant recipients with the skills they need to successfully run their own franchise.

Find out more

Vistaprint 99 Days of Design

The 99 Days of Design initiative has been created to support 99 small businesses (including 14 UK businesses) with a grant of £12,000 and ‘refreshed design identities’.

Find out more

£25,000 #BusinessBoost grant competition

Simply Business has launched a £25,000 Business Boost grant for 2021. It’s designed to help entrepreneurs launch a new business or help existing SMEs bounce back from challenges posed by Covid-19.

To enter, you’ll need to fill out a form on the competition website detailing why you think you deserve the grant.

You must not have a turnover of over £500,000 or have received over £50,000 in private grant funding in the past two years – this doesn’t include government grants. The closing date is September 17, 2021.

Find out more

Apply for a share of up to £18m for developing innovative healthcare product, technologies, and processes.

Projects include: addressing disease prevention and proactive management of health and chronic conditions, or earlier and better detection and diagnosis of disease - leading to better patient outcomes
Or tailored treatments that either change the underlying disease or offer potential cures
Total project costs must be between £250,000 and £4m

Deadline for applications: 26th August 2021

FIND OUT MORE AND APPLY

Employing an Apprentice

Apprentices are aged 16 or over and combine working with studying to gain skills and knowledge in a specific job.

Apprentices can be new or current employees.

You must pay the apprentice at least the minimum wage.

Your apprentice must:

work with experienced staff
learn job-specific skills
get time for training or study during their working week (at least 20% of their normal working hours)

Find out more

Funding Competition

ISCF smart sustainable plastic packaging: business-led R&D

Competition opens: Tuesday 18 May 2021
Competition closes: Wednesday 8 September 2021 11:00am

Description:

Innovate UK, part of UK Research and Innovation, will invest up to £7 million from the Smart Sustainable Plastic Packaging Programme in innovation projects.

These projects must have the potential to significantly impact the 2025 UK Plastics Pact targets in the long term, and address widely known problems related to plastic packaging for consumer products.

Your proposal must:

improve the sustainability of the plastic packaging supply chain
make a significant contribution towards delivering the targets of the UK Plastics Pact
utilise at-scale innovation in design, technology, processes, business models, supply chains or data for plastic packaging
embed a whole systems approach to plastic packaging sustainability, considering environmental, economic, and social factors

In applying to this competition, you are entering into a competitive process. This competition closes at 11am UK time on the deadline stated.

Funding

Grant

Project size

This competition will award grants from £200,000 to £4 million per project.

Coronavirus Restart Grant

The Restart Grant scheme supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.

The Restart Grant scheme supports businesses in reopening safely as COVID-19 restrictions are lifted. Grants are available from 1 April 2021.

Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council.

Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council.

ARE YOU ELIGIBLE

Innovation Grants

Billions of pounds worth of grant funding is available to UK companies developing new, innovative technologies. From Innovate UK to the European Space Agency, there are multiple opportunities for UK companies to secure grant funding for their R&D projects, you just need to know where to look. Once found, UK companies receive an injection of non-dilutive funding for their technical development. Maximising existing capital with grant funding and furthering their technical position.

Learn more

Business Advice and Masterclasses - East of England

Advice, workshops, loans and innovation grant services for start-up and trading businesses in Cambridgeshire, Essex, Norfolk and Suffolk

Learn more

Repair Grants for Heritage at Risk

Grants for the repair and conservation of historic buildings, monuments and landscapes.

Learn more

National Grants & Loans Directory

Start-up Loans

Borrow up to £25,000
Fixed interest rate of 6% p.a.
1-5 year repayment term
12 months of free mentoring
Government-backed

Find out more

EU Funding

A large number of European Union (EU) programmes offer financial support for projects helping to deliver economic, social or environmental benefits. Organisations can apply for funding for projects under many of these funding programmes.

To be eligible for EU funding, your organisation usually needs to have:

partners from at least 3 member states

match funding - this means you need to provide a certain amount of financing yourself to match the contribution from the EU (the rate varies according to the programme but is typically around 50%)

pre-financing - funding payments are usually made in arrears so you would have to spend money before claiming back the EU contribution.

EU funding programmes operate in 7 year cycles. The current cycle runs from 2014 to 2020.

Find out more

SEBB - South East Business Boost

The South East Business Boost (SEBB) programme offers growth grants to small and medium sized businesses in Kent.

The scheme aims to deliver investment to businesses across the South East Local Enterprise Partnership region:

The programme can fund up to 30% of the costs of qualifying projects, with the remaining 70% being met by the business. No purchases may be made, or suppliers engaged, until your project is approved. Once approved, all purchases have to be paid for in full before 30% of the cost can be claimed back.

The South East Business Boost II (SEBB II) grant opened on 15 June 2020.

Businesses who were supported with either a grant or a business support intervention on the South East Business Boost I (SEBB I) programme are not eligible to apply for SEBB II.

Please note that business support workshops and 1-2-1 advice will be available later in the year.

Find out more

Kent County Council - Innovation Loan

The Innovation Investment Loan scheme (i3) is funded by the South East Local Enterprise Partnership, Local Growth Fund, and has delivered up to £6 million in loans to local businesses.

The scheme offers 0% loans between £200,000 and £999,999 to small and medium sized businesses with the potential for innovation and high growth; to develop new or expand existing products, services, or processes, where these will lead to sustainable new employment.

The deadline for pre-applications closed on 7 December 2018. However, if you wish to register your interest in accessing future funding, complete our expression of interest form.

Find out more

Business Advice and Masterclass – East of England

All businesses trading within Cambridgeshire, Essex, Norfolk, and Suffolk can apply for grants for innovation development.

You can also receive advice on how to start a business, grow a business, low carbon businesses, and find access to finance.

Support: Grants, expertise, and advice
Business Stage: All
Region: Eastern
Maximum company size: 249 employees

Find out more

No Use Empty Loan - (NUE)

The following local councils participate in the above scheme:

Ashford, Canterbury, Dartford, Dover, Folkestone & Hythe, Gravesham, Maidstone, Sevenoaks ,Swale, Thanet, Tonbridge and Malling, Tunbridge Wells.

Loans for property owners to convert empty buildings into quality residential housing.

Find out more

South East Business Boost

The South East Business Boost (SEBB) programme offers growth grants to small and medium sized businesses in Kent.

The scheme aims to deliver investment to businesses across the South East Local Enterprise Partnership region of Kent.

The programme can fund up to 30% of the costs of qualifying projects, with the remaining 70% being met by the business.

No purchases may be made, or suppliers engaged, until your project is approved.

Once approved, all purchases have to be paid for in full before 30% of the cost can be claimed back.

Find out more

Getting EU funding

You can still apply for EU funding and will continue to get any funding you’ve been awarded.

Although the UK has left the EU you’ll continue to get any EU funding you’ve already been awarded. This includes funding you’re due to get after 31 December 2020.

You can still apply to some EU funds under the current spending framework.

It has not yet been decided what funding UK organisations will be able to apply for after the spending framework ends. This page will be updated when more information is available.

Find out more

Adur and Worthing Small Business Grants

Anglia Business Energy Efficiency

Apprenticeship Grants

Architectural Heritage Fund

Arun Valley Business Grants

Backing Youth Ambition

Better Broadband Subsidy Scheme

Black Country Growth Deal Funding

Boost4Health

Brexit Readiness Vouchers

British Council Grants