Finance

The Best Grants Available For Your Small Business

Allison S Robinson | 1 February 2022 | 2 years ago

The best grants available for your small business

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).

Grant Updates

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:

  • Coronavirus Statutory Sick Pay Rebate Scheme
  • Furlough Scheme
  • Self-Employment Income Support Scheme
  • Recovery Loan Scheme
  • VAT rate reduction
  • Additional local grants
  • Scotland specific funding
  • Wales specific funding
  • Northern Ireland specific funding

Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS)

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.

An example of the options in Scotland is the Strategic Framework Business Fund (SFBF). You can find out how to apply for funding from this initiative and other funding options on the Scotland government website.

In addition, there has been an extension to their business rates holiday in Scotland. The announced extension applies to the industry categories of retail, hospitality and leisure businesses. The rate-relief only applies to properties that are occupied by the business. To obtain this small business grant option, you need to apply to the relevant local authority, and they have a full proxy to assess and grant the funding.

Ask your local council in Scotland about additional support such as their discretionary fund, or talk to your Development Manager. You can research additional information on small business grants for your Scottish business on the government portal Find Business Support website.

Small business grants in Wales

If your business falls under the authority of the Wales government, then the Business Wales Government portal will be your go-to online spot to find out about small business grants. You will find a very helpful database of funding options and funding partners. It is user-friendly and fully searchable.

You will also find access to the ERF Phase 3 Business Development Grant. You can initiate your application for it by using the eligibility checking tool.

In Wales, there has also been an extension announced for business rates relief. The relief extension is specifically applicable to the industry categories of retail, hospitality and leisure businesses. There is a further parameter relating to this relief; the relief only applies to rateable values up to GBP500k. The extended end date is now until March 2022.

Depending on your industry sector, you can apply for niche business grants or relief that relate specifically to your industry. There are niche industry business grant packages that can be accessed for:

  •  Agriculture
  • Childcare
  • Culture
  • Creative sector
  • Sports sector
  • Life sciences
  • Social business
  • Taxi and private hire
You can research the full Sector Business Grants available via the Welsh government website.

Small business grants in Northern Ireland

You can research the availability of small business grants in Northern Ireland by consulting the NI Business Info portal. This is the official, government-approved online portal for Northern business advice and guidance in Northern Ireland. You will find diverse links to relief.

Certain commercial properties will qualify for business rates relief. This will be subject to the type of business function that the property is being used for. The rates relief small business grant has been running since the 1st of April 2021. The end date of this scheme is the 31st of March 2022. Here is a list of example industry categories and property uses that could be approved for business rate relief:

  • Hospitality – The business descriptions that might qualify include pubs, cafes and coffee shops, pubs and restaurants.
  • Tourism – Examples of businesses that might qualify are business-rate guest houses, bed and breakfast establishments, hotels, guest houses, privately-run caravan or camping sites. Other examples are self-catering accommodation, attractions and related facilities.
  • Leisure – Related businesses include leisure-related centres or facilities, movie or drama theatres, various museums and clubs (and clubhouses), grounds or premises related to sports and music venues.
  • Retail or retail-related services – This applies to diverse shop types with a Net Internal Area (NIA) floor space area of less than 500m².
o   This NIA must be predominantly utilised for the retail sale of food or household items. It also applies to off-license businesses.

o   It also applies to retail services such as:

  • Hairdressers and barbers
  • Beauty salons and nail bars
  • Fast food businesses
  • Garden centres
  • Travel agencies
  • Automobile showrooms
  • Auction houses
  • Property and estate agencies
  • Clothing, apparel and shoe repairs
  • Electrical equipment repairs
  • Childcare – Facilities that provide day-care or nursery care.
  • Airports – Belfast and Derry
The main support packages are not accepting new applications, but some industry-specific small business grants are still available. Research via the NI Business Info portal and check with local councils. New grants may be opening up, so it is best to keep in touch and up-to-date.

Small business grants that have stopped

Coronavirus Job Retention Scheme

The deadline for this grant program, also called the Furlough Scheme, was the 30th of September 2021. It was available in United Kingdom countries. Your final claims should have been submitted by the 14th of October 2021.

Self-Employment Income Support Scheme

This support program had the same deadline as the Furlough scheme, i.e. 30 September 2021. It had also been available in United Kingdom countries. The fifth and final cycle of SEISS grant submissions should have been submitted before the deadline for the claims to be valid.

It is important to remember that if your claim was successful and funds were paid to you, this must be reported on your HMRC submission.

VAT Deferral Payments Scheme

In 2020, income screeched to a halt for many companies, which meant that many VAT payments were affected.  Businesses were allowed to apply for a deferral of their VAT payments that would otherwise be due between 20 March 2020 and 30 June 2020. The deferral allowed full payment to be submitted by the 31st of March 2021 or to stagger payments. The staggered payment option was an online payment program that businesses had to register for by the 21st of June 2021. This facilitated overdue VAT payments via smaller, manageable instalments that did not attract interest.

Ignoring overdue VAT obligations is not advisable as it attracts significant penalties and interest rates. Get your accountant to contact HMRC urgently to negotiate a VAT payment solution.

Topic

Finance

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