Government grants

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Government grants

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Why should you read this guide?

Most businesses at some point need money to help them grow and develop. There are a number of ways to access this money but one of the best is if you are able to qualify for a government grant. There are a number of grants still available to businesses although not as many as there used to be. This guide will tell you where you should start looking for grant assistance and how you should apply.

Background

Very basically grants are a sum of money available to your business by a government body to assist your business with a project. If you manage to apply properly, get past the stringent criteria and meet ongoing conditions then you may be given a grant towards the project. Best of all if you continue to meet conditions set then you won't have to pay this back. What you need to remember when looking at grants is that this is tax payers' money that you are applying for. As such the custodians of this money need to make sure that by giving you the cash, rather than someone else, the tax payer is going to receive a good return. The return tends to be related to factors such as jobs or increased sales, adding to the GDP. This is a different return from a shareholder looking for a dividend or a bank looking to ensure they get their money back. You need to bear this in mind when applying for government grants.

How to access grant funding

Grants are administered by local government bodies e.g. Business Links, RDAs, Business Gateway, Scottish Enterprise and local council offices. These can either be general grant funding or specific to a type of business or geographic area. The grant is likely to be only for a percentage of the total project cost so you need to make sure you have funding available for the remainder.

If you have a business adviser allocated to you from one of these bodies then they should be your first port of call. If not then you should look to contact either the business link or gateway in the first instance. Do not contact them and ask for a grant! These bodies all have targets to meet and by approaching them for financial assistance you will need to show that you are willing to work with them to achieve your goals. In the main they do have a lot more to offer than simply money anyway and are a good sounding board for your business idea. Once you have established contact with a business adviser they will be able to help you identify grants that you are eligible for and help you with the application process. A very important thing to remember is that you will only be able to gain grant funding for projects that have not started. If you have already committed to the project they will take the view that you can afford to pay for it.

If you have a company that creates or develops new products then you will stand a very good chance of receiving public sector grant funding. Innovative companies are considered to be a good use of government funds.

Summary

To access government grants you must:

Have a business plan that shows you need the money
You need to have access to the rest of the funds required
You cannot have started the project before making the application
You need to show that there is going to be a benefit to the tax payer in your project e.g. job creation or new innovative product
It is best not to lead with a request for money but to work with the business adviser on the whole project. You will have stringent selection criteria to go through so it is best to have the adviser on side
During and after the project you will need to provide detailed information to the government body in question. If you manage to do all of that you will obtain a significant amount of money towards your project

Further information

Log on to www.businesslink.gov.uk for more information on grant funding or approach your local business link or business gateway.