Top Small Business Grants in the UK to Apply For Now

There are over 200 small business grants for UK entrepreneurs that can reduce startup costs and help your business grow—and you won’t have to repay any of them.

Below you will find more information on small business grants in the UK in 2022, including where to find them and how to apply. 

What is a Small Business Grant?

Small business funding grants are non-repayable schemes typically provided by the government. Although designed to help entrepreneurs run their businesses, they are usually given for a specific purpose, such as boosting the local economy or industry or creating more jobs for certain communities or age groups. 

Grants tend to offer financial assistance, although they can come in the form of free equipment, training & mentorship programmes and even vouchers. 

Keep in mind that all grants for small businesses have different guidelines, objectives and qualifying criteria. It is also important to note that most of them have complicated and lengthy application processes due to increasing competition—small businesses make up 99.3% of private-sector ventures in the UK with most of them vying for funding. 

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

The biggest difference between loans and small business funding grants is that a loan must be repaid and come with high-interest rates, whereas grants are usually non-repayable. That said, some grants may be conditionally or partially repayable depending on the organisation offering the funds, so check before applying.

What Small Business Grants Are Available in the UK?

There are hundreds of grant funding for small businesses aimed at different industries, regions and communities. What’s more, the number and nature of these grants constantly changes as new schemes are released and old ones are closed for new applications. 

The best way to stay ahead of the game and find upcoming grants is to check the government’s business funding search tool or check with your industry organisations or trusts. 

Entrepreneurs in England can take a look at the Local Enterprise Partnership growth hub for their region—there are currently 38 LEPs across the country acting as partnerships between businesses and local authorities, providing support, advice and funding. 

Those living in Scotland can search the official funding advice site, while Welsh businesses may find available grants by using the government’s funding locator. SMEs in Northern Ireland can look for available financial support here. 

Below you will find a list of small business grants in the UK available at the time of writing. Bear in mind that this is not a comprehensive listing—to find a list of all the grants suited to your industry and company size, check the government website. 

Innovate UK

This government scheme is aimed at innovative businesses in the UK that develop new technology and ideas. It is open to businesses of all sizes and offers grants between £25,000 and £10 million in areas such as artificial intelligence and data, clean growth, mobility or other innovative tech projects. 

R&D Relief

This is not a grant per se, but rather a tax relief that can help fund businesses in the science and technology sector. Eligible SMEs can deduct 130% of qualifying costs from their annual profit on top of the standard 100% deduction. If unsuccessful, i.e. if the company is loss-making, you could claim a tax credit of 14.5% of the surrenderable loss.

Grants for apprenticeships 

There are government grants for small businesses that specifically support companies providing training and mentorship of apprentices. Companies with a pay bill of at least £3m a year, can get funding and an additional 10% from the government for the training of an apprentice, although this depends on where you live. Employers that do not pay the apprentice levy, will add 5% towards training and assessment costs. 

Gigabit Broadband Voucher Scheme

The government is providing vouchers worth £3,500 to SMEs installing gigabit-capable connections to people’s homes as part of the nationwide initiative to provide high-quality broadband for everyone. To find out if you qualify, type in your postcode on the website. 

Seed Enterprise Investment Scheme (SEIS)

Although this is also not technically classified among the small start-up business grants in the UK, SEIS can help new companies raise funds by providing tax relief to individual investors in the company. Businesses can get up to £150,000, but you will have to follow the scheme’s rules for the investors to claim and keep the SEIS tax reliefs.

UK Tradeshow Programme

Export businesses (or those considering exporting) can apply and get a grant of £2,000 to £4,000 to cover some of the costs related to attending and exhibiting pre-approved conferences and tradeshows taking place out of the country. 

Plug-in grant for low-emission vehicles

With this grant SMEs can get a discount when purchasing new low-emission vehicles, including taxis, vans, mopeds, and wheelchair-accessible vehicles. There is no need to apply for the grant—if you are eligible, dealers will include the discount in the price (up to £1,500).

UnLtd Social Enterprise Funding

UNLtd awards new and established social businesses with grants up to £8,000 and £18,000, respectively. If you’re an entrepreneur who aims to resolve a social issue you could apply and get funding as well as an extensive support package (including a dedicated support manager, workshops and networking opportunities) to help your business grow.

The National Lottery Heritage Fund

The Heritage Fund, as the name implies, aims to help national, regional and local heritage projects with the ultimate goal of improving the local economy and creating more attractive places for people to live and work. The amount available ranges from £3,000 to £5 million and prioritises projects that support inclusion and wellbeing as well as ones that promote job creation and skills development. 

The Prince’s Trust 

This scheme supports young people between the ages of 16 and 30 who are interested in starting and operating their own businesses. Support is available in the form of funding and resources, as well as training and mentorship programmes. 

CITB Grants Scheme

Registered CITB businesses can receive funds contributing towards the cost of training employees in the construction industry, thus ensuring that they have the skills and qualifications to carry out work according to safety and quality standards. Funding varies according to the region and the level of training provided (but in general grants can go up to £3,500). 

Power to Change Programmes

Power to Change offers several government grants for small community businesses, charities and social companies trying to make a positive change in the local areas. In addition to developmental grants for sustainable and social enterprises, which range between £1,000 and £40k, you could get expert support and mentorships as well. 

Help to Grow: Digital

This is a government grant giving small business owners a 50% discount (up to £5,000) when buying pre-approved business software. The aim is to provide objective advice on how best to adopt the right technology for your company as well as help cover some of the cost of purchasing customer relationship management and accountancy software.

CRACK IT Challenges

This is a challenge-led competition inviting SMEs to solve specific business and scientific challenges either by improving a process or developing a new commercial product. To that end, the programme provides small business funding grants of up to £1m across three years. 

Knowledge Transfer Partnerships (KTP)

This programme provides your company with access to expert resources, consultancy services and networking opportunities—in short all you need to turn an idea into a profitable business. KTP will cover 67% of the project cost for SMEs (50% for bigger companies), i.e. provide between £75,000 and £90,000 per project year. 

How to Apply for Grants for a New Small Business?

All small new business grants are different and have their own application process. In general, though, you can follow some steps to make sure that your application is successful.

1. Do research 

Talk to the grant body and carefully read the grant’s objectives to find out what the provider is looking for. This will help you tailor the application to their requirements, as well as save you time from applying for funding you may not qualify for. 

2. Apply as early as you can 

Some grants for small businesses may have a limited amount of money to invest, so applying as soon as the scheme is launched increases your chances of getting in. 

3. Focus on the objectives of that specific grant

Instead of writing a generic proposal, make sure to focus on what your business does and how it can meet the goals of the project, what the grant money will be used for and what outcomes you expect to see. 

4. Make it simple 

Make your proposal easy to understand—you don’t need overly-technical jargon to get your point across.

5. Get a business plan ready

Most government grants will require that you present a business plan, which should include your objectives as well as your business position and balance sheet (if you have started operations). The business plan needs to be clear, simple and thorough. You may also be required to present a cash flow forecast showing how the grant will affect your finances. 

Alternatives to Government Grants for a Small Business

If you are not eligible for any of the options above, there are some alternatives you can try to get funding. 

Business loans

As a business, you can borrow a lump sum loan that you will repay later with interest. Most loan providers, including high street banks, digital banks or online lenders will let you borrow around 25% of the company’s annual turnover. You could also look at asset financing that allows you to use your assets as security for a business loan. 

Equity finance 

This involves selling shares in your company in return for funding and can be a good option if lenders reject your loan application. You could go with venture capitalists or an angel investor, both of which tend to look for high growth potential—the difference being that angel investors are on hand to provide advice as well as finances.

Crowdfunding 

This trend has really gained traction with average funding per campaign reaching $18,392. It can be an excellent opportunity to get your business going, although it does require a lot of effort. 

P2P lending 

Peer-to-peer lending is another option that can help you get funding. You could go to a P2P lending platform directly or try an online broker that can match your business with potential lenders/investors and help you find the best deal.