There is nothing easy about starting a business, especially if you have an innovative idea, but you are lacking funding. This is especially troubling for small businesses, which are often started with a limited budget and without significant investor backing. Luckily, there are a range of small business grants available to UK companies. Government grants for small businesses are there to help businesses evolve, grow and succeed, without the risk of being held back by an initial lack of money.
What is a UK Small Business Government Grant?
A government business grant is non-repayable financial support for UK businesses, so unlike loans it does not usually need to be paid back. For small business owners, entrepreneurs and anyone starting or growing a company, UK small business grants can provide grant funding for a specific project such as buying equipment, investing in research and development, supporting innovation, or improving energy efficiency.
Government business grants matter because they give small businesses access to business finance that can help them launch, expand and create jobs without taking on extra debt. Grant funding can come from national, regional and localised sources, including government agencies, local authorities, economic development organisations, specialised grant programmes and some private organisations.
The specific criteria and requirements for government business grants vary depending on the provider and the purpose of the grant. Eligibility criteria takes into account a lot of different factors, and most grants target SMEs, usually businesses with fewer than 250 employees, while some have strict eligibility criteria that require a business to be UK-registered and based in a particular region. Many grants also assess the type of business, industry, financial need, size, growth potential and whether the funding will be used for defined purposes such as equipment, R&D or energy efficiency improvements.
There is a lot of competition in securing funding, and the application process for many grants is competitive and rigorous. Applications usually require a clear business plan, supporting documentation and evidence that the funding will deliver measurable outcomes such as job creation or productivity gains. Below, we look at what UK government business grants are, the main types available, including Innovate UK, R&D tax relief, The National Lottery Heritage Fund, The King’s Trust and Growth Hubs, plus the key eligibility and application points to check before you apply.
What UK Government Small Business Grants Are Available?
There are a range of small business grants available, and many are sector specific grants tied to key sectors, regions or local council areas. There are also funding options across the UK for start ups as well as established small businesses. Some schemes support technology, innovation, manufacturing, green energy and other specific industries, and awards can sometimes reach hundreds of thousands of pounds. Some grants use match funding, may only cover part of a project’s costs and often ask for business plans and financial forecasts. Below, we have listed some of the top small business grants that are currently available.
Innovate UK– Innovate UK is part of UK Research and Innovation (UKRI) and it’s a grant focused on helping UK businesses with innovation. This could be innovation related to products, services and processes, or anything that helps the business to grow, develop and scale up. Innovate UK provides tailored support, grants and business loans to various businesses. The criteria for an Innovate UK grant varies depending on the exact grant being applied for, but the focus is always on developing new ideas.
Research and Development (R&D) – R&D is a form of tax relief aimed at supporting businesses engaged in innovative research, technological advancements or product development. These grants aim to encourage innovation and enhance competitiveness within the industry, and they are available to small businesses that are hoping to research or develop something new. There are two primary mechanisms for small businesses looking to innovate, including the Merged R&D Scheme and the Enhanced R&D Intensive Support, and any grant funding is usually for a specific project rather than general spending.
Export support – Some export schemes can help businesses expand into international markets, but grants require matched funding in some cases and are often tied to clearly defined costs.
The National Lottery Heritage Fund– The National Lottery Heritage Fund provides grants to small businesses as a way to help them sustain and transform the UK’s heritage. This could include businesses related to museums, parks, cultural traditions and historical places. The grants fund projects of all sizes that connect people and communities to the UK’s heritage, including infrastructure improvements.
The King’s Trust– Formerly named The Prince’s Trust, the now King’s Trust supports individuals aged between 18 and 30 who want to start their own business. A lot of what The King’s Trust does is centred around providing funding and resources to help people get started, but training and mentoring help is also available.
Growth Hubs – These replaced Local Enterprise Partnerships (LEPs) and provide businesses with funding, support and guidance for the work they are doing in the local area. Local Growth Hubs help businesses find regional funding opportunities, business support and additional funding, including schemes run by a local council. There are a variety of grants available and they must be given to businesses in the local area, so they are worth looking into for small businesses who need funding, training and opportunities.
Start up Loans – Government-backed loans of up to £25,000 are available to start ups or businesses trading less than 60 months to help them start or grow a new business. Loans can be paid back over a term of 1-5 years.
Energy efficiency and Net Zero support – Some schemes focus on energy saving initiatives for small businesses, including local council sustainability programmes, and the funding can help pay for upgrades aimed at cutting carbon emissions.
Boiler Upgrade Scheme– The boiler upgrade scheme can help eligible businesses or property owners in England and Wales move to lower-carbon heating, including installing a biomass boiler.
As you can see, there are a lot of government grants for small businesses available in the UK, all of which are aimed at helping small businesses to succeed, and to minimise the chances of being held back by limited funds. Whereas some grants are aimed at a specific industry or only to new businesses, others are much broader and are available to a wide range of people. A lot of government business grants are tailored to businesses pursuing innovation or development in one way or another.
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There is nothing easy about starting a business, especially if you have an innovative idea, but you are lacking funding. This is especially troubling for small businesses, which are often started with a limited budget and without significant investor backing. Luckily, there are a range of small business grants available to UK companies. Government grants for small businesses are there to help businesses evolve, grow and succeed, without the risk of being held back by an initial lack of money.
