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What Is Starting a Business Funding?
Starting a business grants can help individuals who want to start up a new business venture locally or nationally and get assistance with all the required areas to be successful moving forward. Funding types for starting a business purposes can include market research, creating a business plan, hiring staff and accessing premises for a first base of operations.
A start-up funding injection can help individuals look into commercialising a business idea that they previously may not have had the means to get off the ground and help start to identify their local, national or international customer base. This funding can make it easier and in some cases quicker for start-ups to grow compared with if they were relying on just their own existing financial resources.
More often than not these starting a business funds come from a Government source, local authority or from another business support organisation. In many cases government, local authorities and business support organisations have an active interest in encouraging start-ups across the UK to help grow and become economically successful in order to boost the overall economy.
Who Are the Main Funding Providers?
Grant providers
Local authorities make up the bulk of grant providers for starting a business grants where they can identify specific needs and challenges for individuals looking to start-up in the local 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 Start up Loans Company, which offers loans to businesses and individuals just starting out to support their initial commercial activities when they may have been turned down for traditional commercial loans, due to a lack of trading history.
There is also regional loan funding from providers such as the Development Bank of Wales, Enterprise Northern Ireland and SWIG Finance who run schemes for different areas, such as the South West, Northern Ireland and Wales. This funding can be used for eligible costs towards starting a business activities, such as initial marketing costs, training and provisional research and development activities.
What Do You Get The Funds For?
Businesses may seek grants or loans to pay towards a range of different start-up activities, which are briefly outlined below.
- Business Plan – Funding to support the development of a comprehensive business plan, including market analysis, financial projections, competitive strategies, and operational roadmap. This helps clarify your vision, secure additional funding, and guide your venture’s success.
- Market Research – Funding to conduct in-depth research on your target market, customer needs, competitor landscape, and industry trends. This informs your product/service development, marketing strategies, and competitive advantage.
- Financing – Funding to access loans, grants, or other financial instruments to launch and scale your business. This may cover start-up costs, equipment acquisition, working capital, and operational expenses.
- R&D – Funding to support research and development activities that contribute to your innovative product or service. This could involve prototyping, technology development, or feasibility studies.
- Purchasing Capital Equipment – Funding to acquire essential machinery, tools, or technology needed for your business operations. This may include manufacturing equipment, software licences, or specialised devices.
- Purchasing ICT Equipment – Funding to acquire computers, network infrastructure, hardware, and software essential for your business management, data storage, and communication needs.
- Company Structure – Funding to cover legal and professional fees associated with setting up your business entity, choosing the appropriate structure (sole trader, private limited company etc.), and complying with legal requirements.
- Hiring Staff – Funding to support the recruitment and onboarding of initial employees, covering salaries, benefits, and potentially training costs. This lays the foundation for your team and operational capacity.
- Training – Funding to invest in training programs for yourself, your staff, or key personnel to acquire essential skills and knowledge relevant to your business operations. This enhances your team’s capabilities and ensures optimal performance.
- Develop a Website – Funding to cover the design and development of a professional website that serves as your online presence, showcases your products/services, and facilitates customer engagement.
- Marketing – Funding to implement initial marketing campaigns and strategies to reach your target audience, build brand awareness, and generate leads or sales. This may involve online marketing, advertising, event participation, or public relations efforts.
- Premises – Funding to cover the costs associated with securing a suitable workspace for your business, including rent, lease deposits, renovation or adaptation of the space to meet your needs, and utility setup.
What Grants Are On Offer?
Here are some examples of grant funding types available
- Start-up Accelerator Grant – New businesses and entrepreneurs 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 getting a business started.
- Retail Start-up Grant – A sector specific grant aimed at individuals who want to start-up a new retail venture such as opening up a shop or opening up a personal services offering in a commercial unit.
- Young Person’s Start-up Grant – A scheme specifically aimed at younger entrepreneurs, typically under the age of 30 to get them supported financially to help start up a business venture.
- Tech Start-up Grant – A scheme for those who want to start an innovative company and look at doing the initial feasibility, research and development activities to ensure viability.
- Rural Start-up Grant – A scheme aimed at supporting new business ventures in local countryside and villages, especially that diversify away from traditional agricultural activity.
- Creative Start-up Grant – A scheme for individuals in the creative sector that are looking to take their skills and turn them into a viable commercial operation.
How Much Funding For Project Costs Is Typically Available?
Every single scheme is different, for many lower cost business start-up activities, it is possible to get up to 100% of the costs covered. Other higher costing more ambitious start-up ventures, 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 starting a commercial venture. A start-up 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 starting a business, a total amount awarded as a grant ranges from £500 for basic start-up costs up to over £100,000 for larger scale launches.
For loans start-ups can access up to £100,000 and over in some instances for major ambitious start-up plans, but with many providers individual loan amounts are fully scalable from £1,000 and above depending on the needs of the individual business activities.
Who can apply?
Individual entrepreneurs or a partnership are able to apply for grant or loan in order to get their business started, up through to existing start-ups that need additional funds to get their business going.
How do you apply?
As the criteria and requirements of starting a business 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 start-up activities for on a longer term basis and that means that many of these starting a business 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 get started within a local area or nationally.
When it comes to the actual stage in the starting a business process you would typically apply for the funding before any planned start-up costs have been spent. The reason for this is because most funding providers will only pay for ongoing start-up costs that have been approved by them and not for old liabilities that you have already carried out.
Want the Full Set of Starting a Business Schemes?
If you want the full set of starting a business 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.
