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What Is Business Growth Funding?
Business growth grants can help businesses who want to carry out activities that help them expand either locally or in the domestic market and meet different expansion goals defined either as long or short term in a business plan. Funding types for growth purposes can include developing new products and services or carrying out marketing activities online and offline to reach new customers.
A business growth funding injection can help businesses look into reaching previously untapped geographic markets across the UK or customer segments to help increase market share versus competitors. This funding can make it easier and in some cases quicker for businesses to grow compared with if they were relying on just their own existing financial resources or it can help kick-start a stagnating business that is struggling with the current high cost of doing business.
More often than not these business growth funds come from a Government source, local authority or from a business support organisation. In many cases the previously mentioned funding providers have an active interest in encouraging businesses across the UK to help grow and recover in the tough economic conditions that have been faced in the post-Covid environment as well as customers spending less money due to high cost of living and overall increasing costs to do business.
Who Are the Main Funding Providers?
Grant providers
Local authorities make up the bulk of grant providers for business growth grants where they can identify specific needs and challenges in the local area and help businesses that are struggling with growth to get a funding injection to seek new opportunities or assist promising enterprises to expand to new locations in the area. There are a few national grant schemes provided by Government agencies or other business support organisations.
Loan providers
There is also extensive loan funding available from providers that are backed by the British Business Bank, which offers a series of loan related products that are distributed via commercial lenders in order to make loans available to more businesses that otherwise would have been turned down if they weren’t able to access Government backed loans.
There is also regional loan funding from providers such as the FSE Group, River Capital, Development Bank of Wales and SWIG Finance who run schemes for different areas, such as the South West, Northern Ireland, Wales, Scotland and the North West. This funding can be used for eligible costs towards business growth activities, such as developing new products and services and marketing costs.
What Do You Get The Funds For?
Businesses may seek grants or loans to pay towards a range of different growth activities, which are briefly outlined below.
- Application of Emerging Technologies: Utilising cutting-edge technologies to enhance business operations, expand market reach, and gain a competitive edge.
- Business Growth Planning: Developing a strategic roadmap for business expansion, including market analysis, financial projections, and operational plans.
- New Website Development: Creating a modern and user-friendly website to showcase products, services, and enhance brand presence online.
- New Product/Service Launch: Introducing innovative products or services to attract new customers, increase sales, and diversify revenue streams.
- New Product/Service Development: Investing in research and development to create new offerings that address market needs and enhance customer experience.
- Marketing Costs: Allocating funds to marketing campaigns that promote brand awareness, drive lead generation, and generate sales.
- Software: Investing in software solutions to optimise business processes, improve efficiency, and gain a competitive advantage.
- Market Development: Expanding into new geographic markets or customer segments to tap into untapped potential and increase market share.
What Grants Are On Offer?
Here are some examples of grant funding types available
- Business Growth and Development Grants – There are many general business growth and development grants available that have allowable expenses to include developing new products and services and covering marketing costs.
- Digital Marketing Grant – Funding available to help carry out online marketing activities, including reaching your customers on social media platforms and running and tracking entire online marketing campaigns.
- Website Design Grant – Funding available to get a business website updated with the latest design trends to ensure maximum user friendly access for your customers across multiple platforms, including on computers, mobile and tablet.
- Business Accelerator Grant – Newer and smaller businesses can access a package of finance as well as support in the form of mentoring and the use of high tech equipment and facilities they wouldn’t normally have access to, on a multi week intensive accelerator programme aimed at promoting growth.
- E-Commerce Grant – Funding to develop a businesses online sales channels, including setting up an online shop, selling on digital markets and finding ways to promote your products and services online.
- Made Smarter Grants – A set of grants for UK manufacturers to adopt high tech equipment and digitise their production methods in order to increase productivity and grow.
- Rural Growth Grants – Funding available to help businesses in rural areas and villages to grow by diversifying away from traditional agricultural activity and carry out activities to increase visitor numbers to local areas by creating high quality attractions and services.
- Small Business Grants – Funding to help smaller sized businesses grow who would otherwise struggle to gain access to more traditional commercial finance as they don’t have sufficient evidence of previous multiple years of business success for lenders to take a risk.
- Tourism Grants – Funding to help businesses in the tourism, leisure and hospitality sectors develop their service offerings and carry out marketing activities that can promote their business to new customers and attractions.
What Loans Are On Offer?
Here are some examples of loan types available
- Business Development Loans – Loans that can help businesses develop and grow and expand into new markets, including helping to develop and launch new products and services.
- Recovery Loans – A type of loan that can help businesses recover from adverse business conditions, such as the after effects of Covid or issues relating to the high cost of doing business or other more localised issues where towns are struggling from an economic slump.
- Tech Finance Loans – Loans for businesses in the high technology sector to help them seek new markets and opportunities to sell their innovative products across the UK.
- Growth Capital Funding – A series of debt finance products including venture debt and term loans where funding providers such as venture capitalists take a risk in funding a developing business with a repayable loan type, rather than take an equity stake in the business.
How Much Funding For Project Costs Is Typically Available?
Every single scheme is different, for many lower cost business growth activities, such as simple local marketing campaigns it is possible to get up to 100% of the costs covered. Other higher costing business growth projects, such as new product and service development 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 costs covered. In many cases this is to ensure that the grant applicant is otherwise financially solvent and serious about taking on some of the financial risk themselves that is involved in pushing forward with growth. A growing business with financial support will eventually need to get itself to a position where it is self-sustaining and profitable without continually relying on grants or other external funding to operate.
From the current set of grants available in the UK for business growth, a total amount awarded as a grant ranges from £1,000 for basic marketing costs up to over £100,000 for large scale product and service development and launches.
For loans businesses can access up to £2m and over in some instances for major growth or recovery plans, but with many providers individual loan amounts are fully scalable from £1,000 and above depending on the size of the business and its requirements for funding.
Who can apply?
Sole traders are able to apply for grant or loan in order to grow their business beyond a single person operation, up through small to medium sized businesses and large corporations.
How do you apply?
As the criteria and requirements of business growth funding is complex and varies on individual business needs, grant and loan providers in this area often invite those interested to submit an initial enquiry and then have a discussion based on their current business plan and growth projections based on the amount of funding they are looking for, 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 many cases, funding has been made available for business growth activities for UK firms on a longer term basis and that means that many of these growth funds stay open for long periods of time. In many cases funding is available for years to ensure a number of businesses are able to grow within a local area or expand nationally.
When it comes to the actual stage in the business growth process you would typically apply for the funding before any growth and development costs have been spent. The reason for this is because most funding providers will only pay for ongoing business growth costs that have been approved by them and not for old liabilities from the past.
Want the Full Set of Business Growth Schemes?
If you want the full set of business growth 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.
