At the end of 2021, most businesses felt quite battered after the past 21 months of challenges. We have collated an overview of small business grants available in the United Kingdom, Scotland, Wales and Northern Ireland, as well as ways to research more options.
We have compiled a summary for you that is relevant for small to medium businesses and the self-employed.
Types of grants available
At a national level, the Government creates and publishes schemes and programs to assist small businesses and the self-employed from various angles, e.g. tax relief, wage relief, etc.
You can also source grants locally from your local authorities, which differ from council to council.
In addition, companies like GrantFinder have a database of international funding sources to support small businesses if your business meets the specifications of the funds. These can be niche or broad.
The information we have collated is updated during the year. Therefore, this summary is currently relevant based on updates made in December 2021 by Chancellor Sunak.
The Federation of Small Businesses also keeps collated data on available grants within the UK (not international).
The aforementioned update by Chancellor Sunak referred to support programs or adjustments such as the reinstating of the NCSSPR (National COVID Statutory Sick Pay Rebate). An additional £1 billion was budgeted for new small business grants as well. The administration and management of the grants have been deferred to authorities at a local level, and the acceptance of claims was expected to open a few weeks after the announcement.
The best grants that have been made available for small businesses are:
This is one of the grants reintroduced in the December announcement. This program caters for small and medium enterprises with a headcount of less than two hundred and fifty. Claims may be submitted for recouping sick leave costs brought about by Covid infections. The claim amount does have a cap, namely two weeks’ worth of leave absence per employee.
Businesses can submit retrospective claims to the grant program from approximately the second half of January.
VAT Rate Reduction Scheme
The VAT Rate Reduction Scheme was established to support the survival of businesses in the industry categories of hospitality, holiday accommodation and attractions.
This relief scheme remains in place until its closing date of the 31st of March 2022. The sales-boosting benefit of this grant offering is available in all United Kingdom countries.
The VAT rate offered to businesses that qualify is set at 12.5%. The original dates of the scheme were extended for a further six months, with the end date being the 31st of March 2022. In April 2022, the standard UK VAT rate of 20% will be enforced.
It is the businesses’ responsibility to ensure their retail and accounting software is adjusted at the appropriate dates to ensure that the correct calculations are done. It is recommended that test transactions are processed to ensure that the changes are effectively updated into the business software.
Recovery Loan Scheme (RLS)
The deadline for Recovery Loan Scheme, a supplementary Covid-recovery grant, was extended to April 2022 in the Autumn Budget. If you had applied for the Coronavirus Business Interruption Loan Scheme (CBILS) and/or the Bounce Back Loan Scheme (BBLS), you could still apply for the RLS grant. The CBILS, BBLS AND CLBILS grant schemes had a deadline of the 31st of March 2021.
The RLS is, in effect, a partial replacement of these aforementioned predecessors. The extension of the RLS came with adjustments. Speak to your accountant urgently about applying or your business’s potential to qualify.
It is important to note that whilst the RLS is a “replacement” of CBILS, et al., if you have borrowed from the CBILS, BBLS or CLBILS, then the amount awarded might cap your RLS award, subject to certain parameters.
Autumn Budget Changes
The changes announced in the Autumn Budget are as follows:
The businesses that will qualify for grants from the RLS scheme have been adjusted to only include businesses that report a total annual income equal to or less than £45m.
A new maximum cap has been set for grant amounts per company, at £2m. In the instance that several companies (that are applying) all fall under one group, then a group cap is also applied, namely £6m per group.
There has also been an adjustment to the amount of coverage that lenders can get guaranteed by the government. This guarantee level has been dropped to 70%.
If you choose a term loan, it comes with a six-year repayment period, which also applies to the asset finance option. This is a great option for injecting some stability into a business as it carefully rebuilds itself after the chaos and financial upheaval of Brexit and global events of 2020 and 2021.
Federation of Small Businesses membership
If you are a member of the Federation of Small Businesses, then the Federation will assist your business in connecting with a range of lenders that supply funding via the Recovery Loan Scheme grant program. They state that their support gives lenders a connection in minutes whilst offering a range of funding offerings via one platform.
One of the lenders participating in the supply of funding for the different grant options is the Co-operative Bank. The FSB Funding Platform has an online guide that supplies detailed information on the options within the Recovery Loan Scheme.
Your business might qualify for various grant options such as an Invoice Finance grant, a capital grant to boost growth (Growth Capital), financing for pension solutions (Pension Finance), a Property Finance grant which can be used for property acquisition, expansion of your current company premises, as well as investment into residential properties or commercial properties.
Trade Finance Option
There is also a Trade Finance option that can be utilised as bridging finance when there are cash flow lulls. For example, the need to purchase stocks can be seriously hampered when you are rebuilding sales, and there are painful gaps between income from debtors or cash sales and commitments to creditors or suppliers.
A Recovery Loan Scheme can give you the commercial power to leverage superior pricing deals with your suppliers and creditors. This commercial power can be applied to deals sourced locally or internationally.
Another important part of business growth is research and development. When done well, this can be costly, but funding is available for this. Talk to your accountant about claiming back your R&D costs. The refund could be as much as 33%.
Additional Restrictions Grant (ARG)
This grant scheme does not have a nationally applicable end date. Each region has had end dates applied and published by the relevant local authority. It is advisable to check if the local authority is relevant to your business’s registered location.
The model of support that is available via the Additional Restrictions Grant (ARG) scheme channels grant funding via the various local councils. Businesses then submit applications for this funding to their relevant local council, and the assessment of the application is actioned and concluded at a local level. The funding relief is aimed to supply support to companies that have experienced severe financial upheaval due to restrictions related to the pandemic.
You can find out the full details of your local council on the government portal.
The local councils have been given full proxy for assessing the applications and are free to award or deny access to funds relating to this grant.
Other discretionary grants and funding
The various local authorities throughout the United Kingdom have pro-actively researched and formulated business grants that make sense for businesses in their region. In addition, various national grants have been delegated down to local authorities with full assessment, approval, and management proxy at local levels.
It is advisable to get hold of your local authorities and chat to them about the variety of funding options or funding partners they might connect your business to, subject to qualifying for them. For example, all business owners can apply to their relevant local authority regarding a deferral agreement for the payment of business rates.
Small business grants in Scotland
There are also a variety of non-United Kingdom business grants and funding initiatives available for companies located and registered in Scotland.