Small Business Grants
The best grants for small business and startups in 2023
30-second summary
- A business loan is an amount you borrow and pay back monthly with interest added. A grant is money given to you that you don’t need to pay back.
- There are many grants available if your business meets certain conditions. E.g., Direct grants, resource, and training grants.
- Some businesses can also qualify for tax relief government schemes including NI relief, business rates relief, employment allowance and corporation tax relief.
- Certain business types are eligible for grants including startups, young entrepreneurs, businesses with apprentices and female founders.
- If you qualify for a grant, to make sure you get it – apply as soon as you can, hire a consultant if needed and have evidence of your eligibility on hand to show why you need the funding.
- If you don’t qualify for any grants, you can apply for a business loan. Bionic can help advise the best route to take if you’re considering this option.
What’s the difference between a loan and a grant?
Most loans are offered by private lenders that add interest to the amount you borrow as a charge for their service. The government does offer loans, such as startup loans, which are available to help people start a new business or grow an existing one.
Grants are usually publicly funded schemes awarded to businesses by the government or a charitable organisation or trust. They come with certain conditions attached, as they’re designed to help those that need the money most or to promote a public cause. The Kickstart Scheme, for example, offers funding to create new jobs for 16 to 24-year-olds on Universal Credit who are at risk of long-term unemployment.
What types of business grants are available?
A range of business grants are available in the UK, each for different purposes. This includes:
Direct grants
Direct grants are those that involve cash being given directly to a business to help fund a specific project. These schemes usually involve fund matching, which means any money you raise to pay for the project will be matched by the same amount of grant funding - essentially, you need to put up half of the money needed.
In most cases, there will also be conditions about how the money can be spent. This is to make sure you’re acting in good faith and spending the money on the project it was raised for.
Resource and training grants
If you want to invest in skills or need access to resources and expertise to get a project off the ground, then the following resource and training grants might be an option:
- Innovation Vouchers - Get up to £5,000 to cover the cost of help and support from an external expert or consultant. Available for startups and established SMEs, these grants are supplied by the government via Innovate UK and could be useful if you need help with anything associated with research and innovation, from new tech to intellectual property.
- Local business support – It's worth checking to see if your local authority offers business support grants to fund training workshops, expert advice, business accelerators, and other forms of training.
- Business support networks - Sometimes other business owners – or former business owners – are the best people to turn to for expert support. Business support networks help business owners get peer-to-peer advice. This can be especially useful if your business is involved in new technologies or has certain best-practice initiatives.
- Business support helplines - You can get advice and financial help for your business from a range of government-backed schemes. This includes things like help with tax, exporting, and writing a business plan. For more details, go to https://www.gov.uk/business-support-helpline.
Tax relief
Despite what the adverts say, tax can be taxing when you’re running a business. That’s why there are a number of government schemes designed to help cut the tax burden on small businesses.
- National Insurance relief – If you have any employees, you might be able to claim National Insurance relief of up to £4,000. However, this is the total allowable relief for each business, not for each employee, and you won’t be eligible if you run a limited company that has only one company director and no other employees.
- Business rates relief – If your business occupies one property with a rateable value of less than £15,000, then you might be eligible for business rates relief. As part of ongoing Covid recovery plans, businesses in the retail, hospitality, and leisure sectors will have a year-long 50% discount on business rates.
- Employment Allowance - This enables you to reduce the national insurance contributions you pay for your staff by up to £5,000 per year.
- Corporation Tax relief – The current main rate of Corporation Tax is 25% on company profits, as of April 2023. This was previously 19%, find out more in our Autumn Budget roundup guide. But, you may be able to claim 'Marginal Relief' if your business has taxable profits of less than £50,000, meaning you could still pay the 19% rate (small profit rate). Marginal Relief works in gradual increases between the small profit rate and the main rate of 25%. So, if you have taxable profits between £50,000 and £250,000 you could be eligible. Check the government website for information on allowances and reliefs.
Who is eligible for grants? (Offer types of grants for each group)
In some cases, the type of business grants you’re eligible for depends on your current circumstances.
Grants for startups
Not to be confused with Startup loans, which are government-backed unsecured loans that can be used to help start a new enterprise or grow an existing one, startup grants are available for a range of business needs.
Here are some of the startup grants currently available:
- The Prince’s Trust - Provides grants for people aged 18 to 30 who want to start and run their own businesses. The Trust also offers mentoring, training and other valuable resources.
- New Enterprise Allowance – Provides funds to start or develop a business, but there are certain conditions attached:
- You need to be aged 18 or over.
- Either you or your partner must receive Universal Credit, Job Seeker’s Allowance or Employment and Support Allowance, or you must get Income Support and be a lone parent, sick or disabled.
As part of the 2021 Autumn Budget, the Chancellor announced a £150 million “angel investors” fund will be launched to encourage the launch of more startups outside of London. You can read more about angel investors with our guide to finding the right investor for your business.
Grants for young people
As well as The Prince’s Trust, there are a number of other grants available to people aged 18 to 30 who are looking to start their own business, including:
- UnLtd – Provides funding and support for social entrepreneurs with social change at the heart of everything they do.
- Shell LiveWIRE - Provides access to knowledge, skills, networks and resources to help young people realise their business goals, create jobs, provide sustainable income, and drive innovation.
Grants for businesses with apprentices
You can get funding from the government to pay for apprenticeship training and assessment or as an incentive payment for other costs. If your business pays the Apprenticeship Levy, you’ll get a grant to spend on training and assessing your apprentices and the government will add 10% to this.
If your business doesn’t pay the levy, you’ll pay 5% towards the cost of training and assessing your apprentice and the government will pay the remaining 95%, up to a funding maximum. This money will be paid directly to the training provider, and you’ll need to arrange how and when to pay your 5% directly to them.
Grants for women
With male-owned businesses more likely to attract funding, organisations are increasingly looking to fund women in business and give them a more even opportunity to succeed.
You can check out the business grants available specifically to women in our guide to grants for female entrepreneurs.
Grants by region
You might be able to get a grant, or some support based on where your business is based. Many counties have their own initiatives to help the area, whether that’s creating more jobs or assisting graduates. Often, there are pools of money put towards these initiatives that you could qualify for.
E.g., Mansfield in Nottinghamshire has a specific business start-up grant for its area. So it's worth finding out if your area has any schemes or initiatives you can apply for.
Grants by trade
It’s possible you might be able to get some support based on the trade you’re in. This could be a grant, free training or access to workshops that could benefit your business.
For example, specialist UK food and drink manufacturers could get up to 25% towards production costs through a scheme called FEAST2. Check government information to see if your sector could get extra support.
Grants for energy-efficient workspaces
There are many government incentives and grants for business owners who think ‘green’. Essentially, this means improving energy efficiency in the workplace and reducing carbon emissions. So, if you were planning to refurbish anytime soon, if you go green you could get funding towards it.
E.g., You could get government help of up to £6,500, but these grants can be locked into specific areas of the country. Some UK counties have their own projects to ‘decarbonise’ the area, so check the full list of government support to see if your country has something you can apply for.
Tips for getting a grant
You should only ever apply for a business grant once you’re sure you meet all the eligibility criteria, but there are some things you can do to help your application.
Contact the awarding body before applying
It might help to get in touch with the awarding body to let them know a little more about your business. This could be especially useful if there’s an issue that’s holding up your application as you’ll have a contact who will know your business and can offer advice on the next steps.
Apply as soon as possible
As you can imagine, awarding bodies get inundated with applications. This means it’s best to get your application in as early as possible.
If you apply as soon as the grant opens, competition won’t be as fierce as it’s likely that fewer people will know about it. The key to applying early is to keep searching to see when suitable grants become available.
Consider a consultant
If you don’t have time to keep an eye on upcoming grants or to search what’s currently out there, a grant consultant can do the work for you.
Consultants will know the best ways to apply, keep track of applications, and even communicate with awarding bodies. This can be useful if you’re applying to a large body that’s more difficult to contact.
Although consultants can be quite expensive, it could be a price worth paying if their expertise helps you land the funds you need. A word of caution though, some awarding bodies don’t accept applications submitted through consultancies.
Pay close attention to the grant’s objectives
It’s important that you know exactly what you’re applying for and that you’re sure your business can meet the requirements of the grant. You’ll need to show evidence of this and explain why you need the funding and how you’ll use it.
Is any other government support available for businesses?
Aside from grants, there are various other government schemes that can help with funding and business costs in 2023, including:
- Northern Powerhouse Investment Fund - Delivered by the British Business Bank and available to businesses in the north of England, the Northern Powerhouse Investment Fund can provide funding to help get your micro business off the ground or grow your business through debt finance or equity injection.
- Venture Capital Schemes - The government has four schemes that offer tax relief to investors. This can help you attract investment to raise money and help with business growth plans. You can find out more, including eligibility criteria, on the government website.
- Energy Bill Relief Scheme - This provides a discount on business energy bills for six months from October 1, 2022. To find out more about the scheme and to see if your business qualifies, check out our guide Does the energy price cap apply to businesses?
- Energy Bills Discount Scheme - This will replace the Energy Bill Relief Scheme and run for 12 months from April 1, 2023. It will provide a discount on eligible business gas and business electricity contracts. Find out more at our guide to the Energy Bills Discount Scheme. Or check out the video below.
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