By Richard Hopes, Partner at Alliotts Chartered Accountants
There are a myriad sources of grant funding available for small businesses and start ups and as a business owner it can be confusing trying to pick your way through the different options to decide whether your business may qualify for support. Here is my advice on how to go about finding out about funding support and some of the key schemes available.
Grant funding seems like a very attractive option for growing businesses, as often there is no requirement to repay the money. However, it can be a difficult and time consuming process so before you apply for grant funding, think about the following issues:
• Are you after money with no strings attached that you don’t have to pay back? or:
• Funds to reduce the risk or take more risk on projects you will undertake in any case?
• How much time and effort do have to spend on your application?
• How likely are you to have a successful outcome?
Once you have thought about these questions, look at the different pots of funding available and decide which one best suits your needs. Some of the largest funds include:
Innovate UK: £536 million in Government Funding available for over 80 schemes
• Provides new support for innovative small and medium-sized enterprises with high-growth potential
• Identifies and invests in the sectors that have the greatest potential for innovation to speed up economic growth
• Helps innovative companies work with their backers so their ideas can be developed commercially
Support involves tasks such as:
• Helping businesses carry out a feasibility study to test an idea and make it sure it will work
• Create a new product or service or improve an existing one through Research and Development
• Providing funding for work with other businesses or research organisations on collaborative projects
EU Grant Support
Horizon 2020 SME Instrument: 2.5 million euros in funding available plus business coaching
Focuses on technology, food production and processing, green technology, ICT, nano technology, security, space or transport.
The scheme works with high growth, highly innovative SMES with global ambitions. They specifically look for companies based in an innovation hub which may have received grants or venture capital funding, received innovation-related tax benefits, or won an innovation prize in the last 2 years.
Nearly 3000 proposals were submitted to the SME Instrument programme in 2014 and of those 46 UK companies were approved for the Phase 1 feasibility study funding and 10 UK companies were approved in Phase 2 for a total of 17 million euros for innovative activities and business plans.
Eurostars: total budget 1.14 billion euros
This grant funding scheme is designed for SMEs engaging in collaborative research across Europe. Projects can address any technological civilian area which has the objective to develop a new product, process or service. Eurostars is a transnational programme, where projects have partners from two or more Eurostars countries.
Successfully funded projects from the UK have included technology related to medical advances and IT technology innovation. On average, 16% of approved projects come from the UK.
These examples are just a tiny sample of the schemes on offer – there are many more. If you are a UK small business and think that you may qualify for grant funding, speak to a financial expert to seek advice on the most suitable scheme for you.