Government support for small business

In the United Kingdom, there is a wide range of support ranging from loans to grants available to small businesses. Finding the right grant or loan for your small business can be tricky, with different factors in place to claim eligibility. With over 200 business grants available in the UK, we decided to put together a list of what your business can claim to help save you some time. 

What’s the difference between a small business grant and a loan?

The two are very different and it’s important to understand the difference when you decide to apply for either. The main difference between the two are that a small business loan is money that you will have to pay back to the lender within an agreed timescale. A small business grant is not expected to be paid back.

However, a grant will be offered if it’s agreed that you invest the same amount into your business. For example, if you’re given a £2,500 grant then you’ll have to invest £2,500 too. 

Where to find government small business grants?

Government grants are available if you’re starting a UK business (including Wales, Northern Ireland and Scotland grants). A good place to start your search is using the Business Finance Support Finder on which you will be able to find a host of different business financing options. You can also find funding options on different websites, which are more specific to where your business is located within the United Kingdom (see list below).

– Wales:
– Northern Ireland:
– Scotland:

Types of business grants

Government backed grants come in different forms and options dependent on what you as the business owner requires. Grants can come as free equipment, cash rewards to get you started or even reduced costs. The most occurring grant is a direct grant whereby you are given money for your new business to cover start-up essentials such as training, investment in equipment, etc. As mentioned in the introduction of this article, this type of grant does expect that you match the investment provided (at least up to 50%). If you’re looking for support with equipment or even investment, many suppliers and wholesalers can support you, which is why we created this website.

With over 200 grants available it can still be challenging to obtain a small business grant from the government. Each will have their own requirements and criteria that you need to fulfil before you can apply. We recommended that you do not start an application process before you have a clear understanding of the requirements that need to be met. Our three main tips when applying for a grant are:

1. Talk with grant body: the best way to understand the grant that you’re interested in applying for is speaking to them directly. This will provide your with an understanding of requirement and they will be able to support you during the application process. 

2. Apply early: the chances are that not just you will be applying to obtain a certain grant. If you apply early you have a better chance of succeeding with your application as there will be more money in the pot. 

3. Check funding: the majority of grant will look to match what you’re willing to invest in your business. Make sure that you have the matching amount available (i.e. £10k grant, £10k available on your balance sheet).

Types of goverment business loans

While there are plenty of private loans available through commercial banks, we’ve decided to focus on government backed loans in this article.

One of the most popular loans you can claim from the government is the ‘Start Up Loan’. This loan allows new businesses to apply for an unsecured personal loan of between £500 to £25,000. As mentioned, Start Up Loans are government backed and charge a fixed interest rate of 6%/year. The loan can be repaid over a period of 1 to 5 years. 

In addition the loan, you will also receive free support and advice to help you with your business plan. Successful applicants also receive up to 12 months of business mentoring. 

Regional loans are also available and can be found on the Business Finance Support Finder on the UK Gov website. Your local growth hub will also provide assistance and information in helping you find a business loan:

COVID-19 support for small business

With the recent outbreak of the Coronavirus (Covid-19), we decided to add this section to help detail the types of business support available to help mitigate losses that will unavoidably be suffered by independent businesses throughout the country. Decision making in this environment can be extremely difficult, we hope that the below will be able to help business owners find the right support to weather the storm until life and business return as usual.

The number one tool we would recommended to use immediately is the ‘Government Support Finder Tool’. This easy to use tool helps businesses and self-employed people in the United Kingdom immediately find and determine what type of support is available to them. 

Bounce Back Loan Scheme

This government loan scheme allows small businesses to access finance quickly during the COVID-19 outbreak. This loan is open to small and medium sized businesses and allows you to borrow between £2,000 and up to 25% of your turnover. Max loan available is £50,000.

The length of the loan is six years, however you can repay early without paying a fee. No repayments will be due during the first twelve months of the loan.

Who is eligible?

You can apply for a loan if your business:

– is based in the UK

– was established before 1 March 2020

– has been adversely impacted by the coronavirus

How do I claim?

There are 11 lenders participating in the BBLS scheme including many of the major retail banks. You should approach a suitable lender yourself via their website.

The bank will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

Apply here:

Coronavirus Job Retention Scheme

The government opened up the job retention scheme for COVID-19 at the start of the pandemic. Employers can now claim up to 80% of their employee’s wages plus NI and pension contributions, if employees have been put on furlough because of Coronavirus. All employers impacted will be able to access this support and all UK businesses are eligible. 

The job retention scheme has recently been extended to October. Furloughed workers will be able to return to work part-time from August and employers are asked to pay a percentage of salaries from the point onwards.

More info here:

Coronavirus Business Interruption Loan Scheme

A new temporary COVID Business Interruption Loan Scheme, created by the British Business Bank, has been opened for small and medium-sized business which helps them with accessing bank lending and/or overdrafts. The scheme will support viable businesses to access government backed finance of up to £5 million. For the first twelve months the interest payments and fees for businesses will be covered by the government. The government will work with up to 40 lenders to provide a guarantee of 80% on each facility to provide the necessary financial aid to SMEs.

Apply here:

Coronavirus Business Grants

The UK government have made £25,000 cash grants available to businesses in the hospitality and leisure secors who have rateable value between £15,000 – £51,000. For smaller businesses who fall below this valuation there are one-off grants available up to £10,000. The government has also made announcement that they will relax certain regulations so that pubs and restaurants can offer takeaway services without prior planninh application. This will help businesses maintain a cash flow during the crisis, many food aggregators have also lowered their joining fees and commission to ensure businesses can remain profitable on their delivery platforms. 

How do I claim this support?

You don’t need to do anything – the government will contact to you with more information if you’re eligible to claim this business grant. If you have questions,  contact your local authority.

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