Grants are one of the often overlooked methods of getting finance for a business. These can come from central government, local government, charity or large company sources and can provide a useful and efficient form of financing for companies.
Grants can take many forms and often follow the purpose of the awarding body. They can be for functional, employment, development or regional reasons and are given to firms and individuals to allow them to assist the awarding body to further its mission.
This type of award will be for a business to carry out a specific piece of work or provide a particular service. A good example of this would be Inverclyde council awarding a grant to a company to provide business advice to start ups. It allows the council to continue to support its residents by awarding a company an amount of money to provide a service. Often they will be for specific sectors such as arts grants or for demographics to provide assistance or opportunities for less advantaged people.
Some awards are specifically to aid employment, often in specific sub sets of the workforce. One form of this would be The Apprenticeship Grant for Employers scheme (AGE), which is a central government scheme awarding employers £1500 for taking on and providing training under a structured apprenticeship.
Some areas will suffer a particular issue such as lack of services, infrastructure, skills or employment. Regional or central government may make an amount of money available in grant aid for firms that are able to provide projects to ameliorate the effects of these issues. In the UK the Regional Growth Fund is a £2.6bn fund designed to provide growth opportunities in the regions for smaller businesses looking to expand. The innovative Scottish Edge award combines both Youth and Growth aspects in their grants for Scottish business growth.
Some grants are awarded to spur or assist development of a specific area. Often central government will identify a promising area of research or development and make an award as a way of bolstering the strategic benefit to the country. Typically they will be match funding but they can also be made from private companies or trusts for philanthropic reasons. An illustration of this is where The Technology Strategy Board gives grants to companies where they demonstrate an innovative idea which offers significant potential to help stimulate economic growth in the UK.
Finding grant finance
There are a number of excellent free resources available on the web listing awarding bodies Some are listed at the end of this article). Networking organisations and groups such as business incubators may well also be able to point the way to good sources of finance as may your accountant or bank manager. There are some paid for books that purport to give a listing of granting bodies but be aware that any print publication is likely to be out of date and that the same information is probably available free from an internet search engine!
It is important to take time to identify awarding bodies that are compatible with the project you wish to finance. Schemes will have rules that are strictly applied and applying for a grant for technology development to an arts awarding body is a sure recipe for disappointment.
Be aware also that although some of the bigger funds will be well staffed, the smaller trusts and charities are often volunteer manned and will meet only very occasionally so timing your application is important.
Each body will have its own application method so it is important to make sure that you fully read the instructions. Also make sure that you tailor your application to match the aims of the particular scheme and are able to show clearly how your project will further those aims.
Most of the larger awards will require a business like, professional application, some requiring a business plan and financials. Some run a selection process similar to the Dragons Den and it may well be appropriate to practice your presentation beforehand. Others, especially at the smaller end of the market will require less formal application methods.
Once an award is made there may be specific requirements that you must comply with and the cash may be handed over in tranches as each waypoint in the project is met. There may be a requirement to show match funding for example or the firm may be expected to provide updates or management accounts to prove compliance.
Grants and awards are an oft overlooked method of obtaining finance and yet they can be a really useful method of getting a project off the ground. If you are in need of cash to develop and move forward it may be worth looking into this area and seeing if there is an award out there for your company.
UK Government help – https://www.gov.uk/business-finance-support-finder
Good advice when looking for grant funding – http://www.smallbusiness.co.uk/financing-a-business/government-grants/
Listing of grant trusts – http://www.fit4funding.org.uk/support-pages/funding-sources/funding-from-trusts/