Do You Qualify for a Business Grant?
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Have you considered using your invoices to raise finance in 24 hours? Where up to 85% of an invoices value can be obtained as a way of improving your cash flow.
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(iii) ‘Soft’ Loans
A ’soft’ loan is a loan provided by the government (or a number of other organisations) that does not require the same amount of security as a standard loan. They also commonly have very low interest rates, or no interest at all.
They are seen as a form of last resort loan, where all other options have been unsuccessful.
The criteria for soft loans vary between the individual organisations that offer them, although it is necessary in most cases to require the loan for up to 50% of a specific project’s costs.
Soft loans are aimed particularly at areas with high unemployment, or at businesses suffering difficulty, however, if you cannot get finance by any other means, then it is a valuable opportunity.
(iv) Awards
Business awards are won in the same way as other awards; they reward a business for achieving excellent standards in a particular field. They will provide excellent publicity (particularly the larger events) and will allow you to gain valuable contacts, as well as being rewarded with a cash prize.
There are many organisations offering awards, some are small local awards, while others are national events. Government agencies, local authorities, and business groups are among some of the organisations that run award schemes. There are awards for all different types of businesses, and for all areas of the country, so there is a good chance of finding an award you are eligible to enter for.
The vast majority of awards can only be won through work that has already taken place; there are few awards for future projects or plans. However, most awards are free to enter, and there is usually nothing to lose by entering.
Awards provide a good opportunity to gain cash and recognition for work your business has done, but remember that there will be many entrants to each award, so you should never rely or plan around award funding.
Some major awards:
Do You Qualify For a Grant?
Despite the common opinion that grants are numerous and easy to get, the opposite is in fact the case. Grants are not overly common, and to get one requires preparation and hard work, as well as some luck.
You need to have (in the vast majority of cases) a detailed idea of a specific project you are financing, with specific targets or goals you hope to achieve. These ideas need to be presented as a crucial part of your grant application.
e.g. Stating that you wish to have a grant for research is not enough. You would need to state what kind of research you will be carrying out, as well as what aims you have and when you expect to achieve them.
You will need to invest as much into any project as you expect to receive in grants. Most grants and schemes work on ‘matching’ your investment, meaning you still need to pay half the costs. e.g. If you want to buy a piece of equipment for £20,000, you would be very unlikely to receive anymore than £10,000 in a grant.
Although grants are given out by a number of different organisations, most of them are looking for businesses that are expanding or creating jobs, particularly in poorer areas. The creation or potential creation of jobs will be an important factor in deciding whether you receive a grant or loan. If your project will cause the loss of a job then it is almost certain not to be accepted.
Almost every type of business is considered for grants and loan schemes, however they often have a bias towards businesses involved with manufacturing or services for manufacturing. This will vary depending on the area you are based and the organisation you apply with; but if you are not a manufacturing business, you will need a good argument to help you receive a grant or loan.
Most grants and loans have a limit on company size (normally based on employee numbers), if you go over this amount, you will usually not be eligible for a grant from that organisation or area. The most common maximum employee sizes used are 10, 25, 50, 100, and 250. This means a wider range of funding is available for smaller businesses, particularly those with 10 or less employees.
If you wish to apply for a grant through the EU, you should be aware that the process of acceptance could take up to a year. There is no limit to the amount you can apply for, but you will not be likely to receive over 50% of any project cost. Some activities are also limited to £61,000 (€100,000) of benefits every three years to help prevent unfair competition.
What Qualifies For a Grant?
Many types of business spending qualify for possible grant support. Equipment and machinery; IT and e-commerce spending; research and development; and expansion or relocation are among the areas covered by most grants. A maximum of £75,000 can be applied for to help with land or building costs.
Equipment bought with grant assistance can be paid for with a lease purchase or credit agreement, as well as outright cash purchase.
Spending that is not eligible for grants includes working capital; interest charges; road going vehicles; rent costs; and hired assets bought through an operating lease.
Article Index
- Grants for Small Businesses
- Do You Qualify?
- Finding and Applying for Business Grants
- Related Articles
