A grant is a sum of money that is given to your business. Grants have often been called free money – but they're not. There will be time involved in applying for grants, and the grant will come with some strings attached. However, there is no interest to be paid and funds are not usually returnable – as long as the terms of the grant are met. Without exception, grants are designed to help businesses to develop in some way.
Central and local governments, local authorities and the European Union, as well as a number of other bodies, award business grants. Some organisations offer help throughout the application process, but do not make the final decisions about who receives funding. In many cases, schemes are designed to implement the local economic development agenda, and often change in emphasis over time. Business Link is a good place to start you search, but internet research may uncover some hidden gems.
Restrictions on grants
Match funding – One of the strings attached to a grant is that you'll have to put up some of your own funding in addition to the grant you might receive. Some grants only cover 50% of the cost of a particular venture.
Specific projects – Grant funding will usually relate to a specific project. This could be a relocation, the development of a new product, the investigation of a new export market, etc. With major grants, it is likely that funders may insist the project becomes viable within a certain timeframe. In addition, the project plan will need to be well developed and defined, with identifiable deliverables.
The application process can be bureaucratic so finding the right contact to talk through your application, plus help push your application through the system, is very important. In addition, knowing what the grant scheme aims to achieve, and what kind of companies have previously been successful in applying can help you to make more successful applications.
Proposal submission is a vital part of the grant application process, and the success of your written application will depend very much on how well constructed your business case is put together. Detailed project descriptions, clear analysis of the local economic benefits of the scheme and a well-constructed business plan are key features of a successful proposal. Some companies employ consultants to write their proposals for them who may ask for a share of the proceeds. Finally, remember that grants are rarely paid for work which has already been carried out and applications should be made in advance of a project.
Timescales can vary – but you should be prepared to be patient. Once a proposal is submitted it can take a while for decisions to be made. Smaller, local schemes may be passed through and decisions made relatively quickly, but for more extensive applications to national providers the application process may take several months. The same applies with European funding, where applications can take up to a year to be completed.
There is often a payment schedule, either at regular intervals throughout a project, or in arrears, upon submission of proof of expenditure. Even though you might have received the grant in principle, you may have to make arrangements to finance the project until the grant is actually paid.