Securing funds for your business – start-up, small, medium, or large – is a challenge that many business owners face, but help is available from the government.
A small and medium-sized employee business is defined as managing fewer than 250 employees or with a turnover of less than £45,000 and a balance sheet totaling less than £39,000, and the funding opportunities from the government could be based upon the specific location or sector. Funds are given for several reasons, such as job creation and making eco-friendly changes, and small business grants could range from cash awards to tax reliefs and come in all shapes and sizes.
Government business grants can be divided into the following categories:
Equity finance is offered to start-ups and young businesses for the reduction of income tax and investments and is provided to businesses of less than two years, and fewer than 25 employees.
Direct grants are awarded directly to new businesses and help cover the cost of start-up requirements, including purchasing equipment and staff training.
Soft loans are a government-backed system that offers repayment terms and conditions, yet is more generous than those offered through banks and building societies. Your business can opt for a lower interest rate payment or enjoy longer-duration repayment periods, whichever is applicable to your business strategy.
What are grants available for small businesses?
Some of the small business grants that you could apply for are:
Regional Growth Fund (RGF)
RGF is a funding program run by national or local organisations. You may apply for the RGF if your business is looking for funding which is less than £1 million.
Grants for young people
Various grants are available to help young individuals who own UK businesses, for instance, The Prince Trust’s Enterprise programme assists business owners aged 18-30 years with a low-interest start-up loan, along with mentoring and guidance.
Start-up grants for unemployed entrepreneurs
For supporting potential entrepreneurs aged 18 or above, there is the New Enterprise Allowance such as Jobseeker’s Allowance, Universal Credit, Employment or Support Allowance, and lone parents, long-term sick, and disabled individuals are included. The successful business owner receives a mentor who can help advise them regarding business growth, and on the business plan approval, a weekly allowance worth £1,274 over 26 weeks is granted.
The Kickstart Scheme offers funding for employers to create six months work placements for an individual between 16-24 years old on Universal Credit, or at risk of long-term unemployment. The scheme runs until December 2021.
Under this scheme, 100 % of the relevant National Minimum Wage is paid(or the National Living Wage, depending on the age of the participant), for 25 hours per week for a total of six months, along with associated employer National Insurance Contributions (NICs) and employer minimum auto-enrolment pension contributions is covered.
Along with this, the government will pay businesses £1,500 as set up costs and training for young people on placements, however, employers must top up wages if extra hours from the worker are needed.
Employers may spread the start date of job placements until the end of December 2021 and can take partner support from gateways organisations, such as a local authority, Chamber of Commerce, and charity or trade body on the Kickstart scheme.