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Funding is a major challenge for even the most savvy start-ups in the UK. Besides applying for a small business loan, there are other sources of low or no-interest financing that are often overlooked, like grants.
In the UK, government grants are one of the top sources of funding for small businesses. Grants are given for a variety of reasons, and range from £500 up to £500,000.
Grants are available in a wide range of fields, and they’re a great way to put your small business ahead of its funding schedule. This article will cover everything you need to know about the most common small business grants in the UK.
Direct Grants
A variety of agencies offer direct grants to British start-ups, and the government’s finance and support page makes it easy to find the kind of grant you’re looking for. Grants are available for both new start-ups and established businesses working in a number of different industries.
Direct grants commonly require you to match what you receive, so you’ll need to find a source of funding for the other half. You’ll also need to use the money as outlined in the grant agreement, so it’s important to have a clear plan for the cash before you apply.
R&D Tax Credits
Research and development is often a major expense for technology-driven start-ups, and R&D tax credits allow you to earn a partial refund on costs related to development. The program offers businesses up to 32 percent of their money back on qualifying costs.
Applying for R&D tax credits is relatively simple, but you can still hire a professional if you want to work with an expert. They can even cover salaries and wages for both full-time employees and contractors that work on development for your business.
New Enterprise Allowance
The New Enterprise Allowance is dedicated to helping the unemployed start successful careers. You’ll need to receive one of the following benefits in order to be eligible:
- Employment and Support Allowance
- Jobseeker’s Allowance
- Income Support
In general, the New Enterprise Allowance offers £65 per week for your first 13 weeks, then £33 per week for the remaining 13.
Innovation Vouchers
Innovation vouchers match small business funding with up to £2,500, more than enough to a difference for a growing company. They distribute the vouchers through a partnership with Birmingham City University. As such, funds are only available for businesses in Greater Birmingham and Solihull.
The vouchers are intended to help you access experts and research institutes in your field. This means there are some restrictions on how you can use the money. Companies that receive Innovation vouchers can also take advantage of free business innovation workshops.
It can be difficult for small businesses to find private funding, and these grants are a great opportunity for any start-up in need of money. Even a small amount of money can have a large impact on the long-term success of a small business.
Rae Steinbach is a graduate of Tufts University with a combined International Relations and Chinese degree. After spending time living and working abroad in China, she returned to NYC to pursue her career and continue curating quality content. Rae is passionate about travel, food, and writing.
This article does not constitute legal advice.
The opinions expressed in the column above represent the author’s own.
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