Small Business Grants
T here is a substantial amount of financial assistance available to small businesses. Unfortunately, a great deal of this potential finance is missed purely because of ignorance of the schemes. Some people do not seem to wish to discuss their plans to establish a new business and so they can never receive appropriate help and advice.
Local Government Assistance
Most Local Authorities offer a range of incentives and grants for businesses to create jobs in their area. Some new businesses overlook this source of funding on the basis that they are creating no new jobs. This is factually incorrect. If you are starting your own business you are, at the very least, creating a new job for yourself.
You should contact the Economic Development Office within your Local Authority to find out what you may be eligible for because there will be some diversity across the UK . To give you some specific examples, however, the following schemes are available from the City of Sunderland Council :
- Rent relief grants - available for between 25% and 50% of the rent payable for the first year of a new lease.
- Basic services grants - a 50% grant is available for the provision of new and essential services including electricity, gas or drainage work.
- Interest relief grants - amounting to 5% per annum for up to two years of the value of loans used to purchase machinery or buildings for industrial use.
- Removal grants - available to cover up to 50% of eligible costs incurred to move to industrial premises in the city.
- Trainee employment grants - grants are awarded to cover 75% of wages of new trainees in the first year and 25% in the second year.
- Exhibition grants - to cover 50% of the costs of exhibiting at a recognised trade exhibition outside the North East up to a maximum of £5,000.
- Commercial Premises' Improvement and Security Grants - of between 50% and 75% of eligible work on premises in specific regeneration areas of the City.
For obvious reasons, all these grants have eligibility criteria, in addition to which they are entirely discretionary. This effectively means that even if you do qualify you may still not receive the funding because the council simply may not have any money left for the scheme.
Central Government Assistance
Through the Small Business Service, the Government offers a number of schemes which can provide assistance in terms of either grants or awards. The three main schemes are:
- Regional Selective Assistance (RSA)
- Regional Enterprise Grant (REG)
- Research and Development Grant.
Regional Selective Assistance
RSA is a discretionary scheme aimed at attracting investment and creating or safeguarding jobs in selected areas of the UK . Grants are available for qualifying projects with total project expenditure in excess of £500,000 and can range from 5% to 15% of the fixed project costs. Each application is individually assessed and the actual amount of the grant will depend on the area, the project, and the number of jobs involved.
Regional Enterprise Grant
REG is also available only in selected areas of the UK and there are variations in the eligibility criteria depending on location. The grant is available up to a maximum of £75,000 on projects which involve up to £500,000 of capital investment. In general, high growth businesses seeking to maximise value added projects with quality output are given a preference.
Research and Development Grant
Previously known as the SMART scheme this initiative provides grants to help individuals and small and medium-sized businesses to research and develop technologically innovative products and processes. Please note that this grant is only available in England . Scotland , Wales and Northern Ireland have entirely separate initiatives.
There are four project areas:
Micro Projects - simple low cost development projects lasting no more than 12 months. The output should be a simple prototype of the product or process. A grant of up to £20,000 is available to businesses with fewer than 10 employees.
Research Projects - typically involve planned research or critical investigation lasting between 6 and 18 months. The result could be new scientific or technical knowledge that may be useful in developing a new product or process. A grant of up to £75,000 is available to businesses with fewer than 50 employees.
Development Projects - involve the shaping of industrial research into a pre-production prototype of a technologically innovative product or process. A grant of up to £200,000 is available for businesses with fewer than 250 employees.
Exceptional Projects - involve technology developments which have higher costs. These projects are likely to generate much wider economic benefits and must be recognised as of strategic importance for a technology or industrial sector. A grant of up to £500,000 is available.