Small business grants: what are they and what's available?

As an owner of a small business, managing cash flow and finding funds to grow can feel like a juggling act.

Thankfully, government bodies and other organisations offer grants to help small businesses access funding without getting into further debt or having to pay steep interest rate.  

In the first few years of its life, a small business can find funding particularly challenging. When you are trying to expand your offering and reach more customers, you probably need to spend money quicker than you can make it.

This can feel like an uphill struggle, but there may be funding out there to help you manage your cash flow or take your business to its next stage of growth. That’s where small business grants come in. 

What is a small business grant? 

A grant is a lump sum that you don’t have to pay back. Small business grants work in lots of different ways, and this differs from provider to provider, but most will require the funding to be used or invested into your business in a certain way.  

There may be some conditions attached to your grant as well. For example, you may need to invest as much money as you receive, or the amount you are awarded could be based on how much you’ve raised from other sources. 

How can you find a small business grant? 

Many organisations offer small business grants, from charities to banks. You will need to shop around to find ones suitable for you and available at any given time. 

A good place to start is with your local authority.

As of April 2024, the functions previously undertaken by local enterprise partnerships (LEPs) have been transferred back to local authorities.

Local authorities now handle business support, funding, and local economic planning functions that were once the domain of LEPs. You can contact your local authority or visit their website for information on available grants and support for small businesses. 

You could also look at individual grant providers’ websites to see what is available or subscribe to receive updates. 

How to apply for a small business grant 

As with all funding, there is no guarantee that you will be given a grant, even if you meet the eligibility criteria. That is why you should take time over your application, as you would in a pitch for a loan. 

You’ll need to show that: 

• Your plans meet the objective of the grant 

• You know exactly how you will use the money (which should be in line with the grant’s aim)
• Your business is successful or promising, even if it’s currently struggling  
• You are ready to start using the money straight away  

All grant funding applications have their own set of questions and criteria.

Here are some general tips for how to approach your application: 

• Include a good business plan (with cash flow forecasts) and ensure it is up to date 

• Get financial and/or accountancy advice to make sure the numbers are all in order 
• Start early. You will need to gather lots of information, carefully write and revise your application, and submit everything well ahead of the deadline
• Show how your business is benefiting people – unlike bank loans, grants are often trying to address challenges in the economy or local community   
• Be clear and concrete about how your business and its plans will achieve the aim of the grant, such as by investing in new equipment or vital hires  

• Pay attention to the wording the provider uses – mirroring its language can show your business is aligned with its values 

What are the different types of small business grants? 

Grants are generally tailored towards certain businesses or those facing specific challenges.

There are grants in the following key categories: 

Self-employment grants

Self-employed people may be able to access grants to help cover for loss of income that isn’t their fault.

Start-up grants

You may be able to access funding to cover the costs of equipment and products while you get your business off the ground. 

An example of this is the Farming Equipment and Technology Fund for funding for equipment to boost productivity and environmental sustainability. 

Another key example is the Prince’s Trust programme. This is one of the notable small business grants for young people, designed to help those aged 18 to 30 start a business.

Grants for taking on an apprentice

To incentivise businesses to train people and give them new skills, the government offers grant schemes to help fund apprenticeships. 

The National Apprenticeship Service supports businesses with both funding and resources for apprenticeships.

Businesses with a payroll over £3 million can use apprenticeship levy funds to cover apprenticeship training costs, and starting from April 2024, they can transfer up to 50% of their unspent levy funds to other businesses.

For employers who do not pay the apprenticeship levy, the government will cover all apprenticeship training costs up to the funding band maximum for apprentices aged 16 to 21.

What grants are available for small businesses? 

There are lots of grants out there for small businesses, and a financial adviser may be able to help you find them and create a successful application. 

Two examples of well-known grant providers include the National Lottery and Power to Change, which target community-led businesses and often have funding available. Another big name is Innovate UK, which helps businesses introduce new ideas and research. 

Finding the right grant for your business 

If you are struggling for cash, it can feel like any funding is good, but this isn’t always true.

Grants often come with specific instructions on how the funding can be used, so these must align with your business goals, too.

Before applying for any funding, speak to a financial adviser or accountant to explore all your avenues and ensure you are on the best course for success.

Get expert financial advice

Finding the right grant for your small business requires exploring various funding sources, including local authorities, industry-specific organisations, and national grant providers.

By staying informed about the latest opportunities and understanding the application requirements, you can secure the support you need to grow your business.

Remember to carefully review each grant's criteria and ensure your application aligns with its objectives for the best chance of success.

Unbiased can quickly match you with a financial adviser for expert financial advice on navigating grant opportunities and optimising funding for your small business.

If you found this article useful, then you might also find our article on crowdfunding for small businesses informative, too.