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What Is Buildings and Renovation Funding?
Buildings and renovation grants can help businesses who want to carry out the construction of new commercial property, buy or lease a new commercial space, or carry out renovation activities on an existing premises.
A buildings and renovation funding injection can help businesses carry out their improvement activities faster or undertake larger development projects than if they were relying on their existing financial resources. More often than not these buildings and renovation funds come from a Government source or from local authorities. In many cases, on a local level funding providers have an interest in getting older buildings up to standard and improving the overall regeneration of town centres, building completely new commercial buildings on business parks or industrial estates or in some cases encouraging businesses to expand their operations by getting them to purchase or lease a bigger commercial premises.
Who Are the Main Funding Providers?
Grant providers
Local authorities make up the bulk of grant providers for buildings and renovation activity where they can identify specific needs within their communities, including providing incentives for regenerating high streets, encouraging the building of new commercial properties or getting businesses to move into larger premises. There are a few national grant schemes provided by Government agencies or other business enterprise organisations.
Loan providers
For businesses looking to carry out large commercial new-build or big renovation projects or purchases, it is more common for a larger loan sum to be offered, either at a competitive interest rate or in some cases interest free. Some of the large government backed buildings and renovation loans come from providers such as The Development Bank of Wales, Highlands and Islands Enterprise or the Welsh Government.
There is also regional loan funding available from providers such as The FSE Group, Maven Capital and River Capital who run schemes for different areas, such as the North West, Midlands and Cornwall. Some local authorities also offer loans instead of grants, which means that when repaid new loans can be issued as part of an evergreen fund to support many businesses.
There are many cases where loans are offered by local authorities and other providers where previously a business interested in a commercial property project has been turned down for funding by a private commercial lender, such as a bank or they have not been offered a sufficiently large enough amount to get the project to completion.
What Do You Get The Funds For?
Businesses may seek grants or loans to pay towards a range of different buildings and renovation activities, which are briefly outlined below.
- New Build: Funding to construct a completely new commercial building, often for a specific purpose such as expanding into a new service area, creating additional commercial units, or replacing an existing structure beyond repair. This typically involves site acquisition, design and construction costs.
- Building Expansion Projects: Funding to add onto an existing commercial building, increasing its size and potentially functionality. This could involve adding new wings, floors, or modifying existing spaces to accommodate growing needs or new programs.
- Building Refurbishment: Funding to renovate and upgrade an existing commercial building without significantly changing its footprint or overall structure. This may involve repairs, modernisation of systems, improvements to accessibility, or energy efficiency upgrades.
- Relocation: Funding to move an organisation or project to a new building or location. This could involve purchasing or leasing a new space, covering moving costs, and adapting the new premises to suit specific needs.
- Shop Front Improvements: Funding to enhance the exterior and entrance of a retail business to attract customers and improve the overall street presence. This might include signage, façade upgrades, accessibility improvements, or energy-efficient lighting.
What Grants Are On Offer?
As grant funding for buildings and renovation tends to be highly localised and typically provided by local authorities, what is on offer varies greatly depending on the amount of funding available for commercial development activities and where planning officers have identified a need for urgent grant funding.
Here are some examples of grant funding types available:
- Business Development Grants – Some broad and generic development or growth grants schemes include allowable expenses to be used to build, renovate, lease or acquire commercial premises.
- Business Recovery Grant – Funding to make repairs and renovation to commercial premises that have been flood or storm damaged or to make adjustments to help prevent future damage.
- Shop Improvement Grant – These are used to improve the inside of a retail premises to improve the appearance and overall space efficiency of the unit or to install new features, such as security measures or interactive technology based enhancements.
- Shop Front Improvement Grant – A scheme specifically aimed at improving the external facade of a retail unit to make it look more modern and up to date or to purchase additional signage or marketing materials.
- Farming in Protected Landscapes Grants – A scheme focused on improvements to rural agricultural premises and walls, fences and gates that are within certain protected landscape areas across the UK.
- Empty Property Grants – Grant to refurbish commercial properties to bring them back into use after being unoccupied for a period of time.
- Heritage Grants – Grants to improve older historic buildings in designated area of a town centre that is considered to be a heritage area. In many cases this funding is used to restore the frontage of buildings that have been weather affected or aged.
- Regenerating Towns Grants – Funding that identifies specific areas of town centres that are lacking in commercial activity or need revitalising and providing grants to improve commercial properties in that area as part of a regeneration initiative.
- Rural England Prosperity Fund – The UK Government has provided funding for rural areas as part of levelling up and in many local areas in England there is funding specifically available for the improvement of commercial premises.
- UK Shared Prosperity Fund – The UK Government has provided funding for local authorities up and down the country as part of levelling up and in many local areas there is funding specifically available for the development and improvement of commercial premises.
How Much Grant Funding For Project Costs Is Typically Available?
Every single scheme is different, for some lower cost renovation grants it is possible to get up to 100% of the development project costs covered. Other higher costing projects can see businesses expected to provide a contribution of funding from other sources, ranging from 40% of costs covered by the grant up to about 80% of the project costs covered. In many cases this is to ensure that the grant applicant is financially solvent and serious about completion of the project and willing to take on some of the financial risk themselves. It also means that by receiving partial/matched funding, a developer might be able to take on a higher cost project than they would have done without the grant.
From the current set of grants available in the UK for buildings and renovation, a total amount awarded as a grant ranges from under £1,000 for small minor renovation grants up to over £1 million for a larger scale commercial property development project.
What Loans Are On Offer?
If businesses cannot readily access a grant in their sector or region that fits their needs, then the alternative is to take on loans, which can typically be accessed from local authorities or larger scale funding providers who typically cover specific regions of the UK.
Here are some examples of loan funding types available:
- Town Centre Loan – Loans to carry out building and renovation and relocation activity for commercial premises within a town centre area.
- Commercial Property Loans – A loan to carry out a property development or renovation for commercial premises
- Stalled Sites Loans – Loans to get a commercial property development project that has previously halted due to unforeseen issues or financial constraints back into action
- Investment Funding – Debt funding and loans offered that include allowable expenses for the purchasing, leasing, development or renovation of commercial premises.
How Much Loan Funding For Project Costs Is Typically Available?
Every single loan term will be different, based on the circumstances of the applicant and the criteria of the lender themselves. However, it is more typical of the case with loans that 100% of building and renovation costs can be covered if the lender thinks that the business in question will have the ability to repay the loan. Otherwise, a partial amount will be offered at a value that the lender deems affordable to repay and a business will need to find funding from other sources to fully cover the project costs.
From the current set of loans available in the UK for buildings and renovation, a total amount awarded as a loan from a single provider ranges from £10,000 and under for smaller commercial improvement projects, up to £10 million for some of the large scale commercial development projects or acquisitions. Obviously there is funding in between for projects and companies of any size.
Who can apply?
Individual traders or developers are able to apply for both loans and grant funding to carry out new building activities in their local area, up through small to medium sized businesses and large corporations.
How do you apply?
As the criteria and requirements of buildings and renovation funding is complex and varies on individual needs, most grant and loan providers in this area often invite those interested to submit an initial enquiry and then have a discussion based on needs, rather than provide a generic application form online to fill out and submit straight away.
Prospective applicants can compare different funding provider options and filter based on their own needs by reading details of what each scheme will fund, what geographic location is covered and the eligibility criteria to apply.
Once both an applicant and funding provider are satisfied that their needs match up, then a more formal application process is issued and the usual financial due diligence checks are carried out and funding is either awarded or a decision not to fund comes with an explanation, so that businesses can take on board feedback against future applications.
When do you apply?
In typical cases of funding applications there is usually a deadline that businesses must adhere to so that limited funding can be processed and applicants can then be considered to be awarded funding.
In some cases funding has been made available to build and improve commercial properties in local areas and the UK on a longer term basis and that means that these funds stay open far longer than others, in many cases for years.
This means that applications can be made for this type of funding on an ongoing basis, as long as the fund states it is open for applications. When it comes to the actual stage in the development project process for a business you would typically apply for the funding before any development work has taken place. The reason for this is because most funding providers will only pay for work completed that has been approved by them and not work that has already been completed.
Want the Full Set of Buildings and Renovation Funding Schemes?
If you want the full set of buildings and renovation grants available, you can use our Grants Matcher, or if you want to save yourself the time and effort then tell us about your project funding needs and let us do the work for you.
