Government Grants For Small Businesses

Government Grants For Small Businesses

In the early days of your business, raising money to get your venture off the ground is one of the biggest sources of stress. Thankfully there are government initiatives that can give you support in the beginning stages. These include government loans, grants, access to enterprise and other finance schemes. We look at how you can access these in the post below.

Start-up Loans

The government-backed Start Up Loans scheme is available to anyone in the UK over 18 and offers both relatively cheap loans and mentoring for new entrepreneurs. These offer lower interest rates or longer repayment periods compared to a bank loan and come with 12 months of free mentoring. Loans must be paid back inside five years, though it's often possible to take payment holidays on the capital you've borrowed.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme offers tax relief to investors buying shares in your company. Investors can receive initial income tax relief of 50% on investments up to £100,000. Offering investors SEIS assurance makes you a more attractive investment, and as long as you meet certain qualifying conditions, you can receive a maximum of £150,000 through the scheme. So if you're thinking of looking for investment, it is well worth seeing if you're eligible.

Enterprise Zones

There are several Enterprise Zones throughout the country and are part of the government strategy to encourage local economic growth. Businesses that operate within Enterprise Zones receive benefits ranging from 100% business rate discounts of up to £275,000 per business over five years to 100% enhanced capital allowances to help companies make significant investments.

Business Grants

From cash awards to tax reliefs, there are a variety of government grants out there. The grants available to you often depend on whereabouts in the country you're located. When you've found a grant that you could be eligible for you can start your application. How that process works will vary for each scheme, generally you will need to know before you being:

  • You have a clear idea of how you will use the funding and meet the grant's conditions and objectives
  • You have a thorough and up-to-date business plan
  • You can provide funds to match the grant if necessary

Business grants in England

There are 38 Local Enterprise Partnerships (LEPs) that can provide funding and advice to help boost your business in your local economy, designed to drive economic growth and job creation, improve infrastructure, and better workforce skillset within the local area. There are also nationwide grants available depending on other factors such as what sector you’re operating in. You can find a full list of grants available in England here.

Business grants in Scotland

Depending on where you're based you could be eligible to apply for grants on offer by the Highlands and Islands Enterprise and Scottish Enterprise as well as local councils. For a detailed list of funding options visit the Scottish Government's Funding Opportunities, which provides access to over 600 funding options and grants.

Business grants in Northern Ireland

Businesses based in Northern Irish can find grants as well as additional business support via NI Business Info. Grants are available for new startups but also Invest NI grants for more established companies.

Business grants in Wales

There are many grant opportunities in Wales and available depending on your location, industry, size and other eligibility factors. You can find out what grants are available via Business Wales.

Are small business grants taxable?

Generally yes, cash grants tend to be taxable because they're a form of income. The amount you're left over after subtracting the relevant allowances and expenses will likely be liable to tax.

Keeping on top of taxes can prove difficult when you're already spinning the many plates that running a business involves. For more advice read our post on how to set up a new business or speak to your accountant who will be able to advise you on any tax relief schemes available, and of course, AccountsPortal will be your corner to help with all your tax and reporting needs.

Further Reading

2024 Spring Budget: What does it mean for small businesses?

A Guide to Sick Pay for the Self-employed or Company Directors

Should You Be a Sole Trader or a Limited Company?