Grants are sums of money awarded, by the government or other organisations, for a specific project or purpose. Generally the amount is not repayable. If your business is in the Ilford area we, at S&Y Accountants, can help you find an appropriate source of grant funds and help you with your business plans.
Ensuring adequate finance is a fact of life if you run a business. Whether you are looking to expand, undertake a specific project or simply fund your day to day purchases, finance is essential.
Obtaining finance is not always easy especially if yours is a small business and particularly if it is a recent start-up. Borrowing may be difficult due to lack of security.
A grant may be the answer.
What is a grant?
A grant is a sum of money awarded, by the government or other organisation, for a specific project or purpose. Normally it will cover only some of the costs (typically between 15% and 50%); the business will need to fund the balance. One of the main features of a grant is that the money is not repayable provided that the terms and conditions of the grant are met but, having said that, their availability is limited and competition for the funds can be quite intense.
This sounds quite simple in principle. However, in practice, it can be somewhat daunting because of the huge number of different schemes in operation and the fact that schemes are constantly changing. Government grants are distributed through a variety of ministries, departments and agencies both on a national and local basis. They are usually for proposed projects only, so ensure you have not already started the project otherwise you may not be entitled to the grant.
The following website may help with initial research into grant availability: www.gov.uk/business-finance-support-finder.
Grants can also be received through Local Enterprise Partnerships (LEPs), local authorities and charitable organisations.
Is my business eligible?
Many of the available schemes are open to all without restriction. Eligibility for others will generally depend upon a number of factors:
- geographical location of the business - for example some schemes are targeted in areas of social deprivation or high unemployment
- size of business - for example some schemes are restricted to small or medium sized businesses – such as those businesses with fewer than 250 employees
- industry or sector in which the business operates - for example some schemes aim to tackle particular problems or issues affecting an industry sector
- purpose of the grant - grants are often awarded for specific purposes - for example purchasing a new machine or increasing employment. Grant bodies often seek specific targets which are often in line with their own objectives.
Applying for a grant
Initial research is essential so that you know what’s on offer.
It is also necessary to ensure that you:
- have funds available to ‘match’ any grant that may be awarded (where this is a condition of the grant)
- need the money for a specific ‘project’ or purpose
- have a business plan
- do not start work on the project before the award is confirmed.
Making the application
It is a good idea, if possible, to make personal contact with an individual involved in administering your chosen scheme. This will give you a feel for whether it is worthwhile proceeding before you spend too much time on a detailed application. You may also be able to get some help and advice on making the application.
It is also a good idea where you can to apply as soon as possible after launch of the scheme. Many grant schemes run for a limited period of time; there will be more money available at an early stage and the administrators will be keen to receive applications and make awards.
The application itself should focus on the project for which you are claiming a grant. It should include an explanation of the potential benefits of the project as well as a detailed plan with costings. You should ensure that your application matches the objectives of the scheme. You will almost certainly need to submit a business plan as part of the application. It is important to show that the project is dependent on grant funds to proceed and that you have matching funds available.
This can take anything from a few weeks to a year or more. Your application will generally be assessed by looking at a variety of factors including your approach, your expertise, your innovation and your need for the grant.
Why you might be turned down
There are various reasons why your application may be turned down. The common ones include:
- your industry sector or field is not relevant to the body making the award
- your plan of action was not detailed enough or was unfocused and lacking in clarity
- you have not made it clear that the grant is vital to the success of the project
- matched funds are not available.
Finally, if your application is unsuccessful, ask for feedback. This will help you to be more effective when applying for funds in the future.
How we can help
If your business is in the Ilford area we can help you to find an appropriate source of grant funds and also assist with your business plan and detailed application. Contact us at S&Y Accountants to find out more.