There is a substantial amount of financial assistance available to small businesses. Unfortunately, a great deal of this potential finance is missed purely because of ignorance of the schemes. Some people do not seem to wish to discuss their plans to establish a new business and so they can never receive appropriate help and advice.

Applying For Grants

The overriding principle for obtaining grants and other forms of financial assistance is that you must make your application, and have the assistance agreed, before you start your business. Unfortunately, a lot of businesses miss out because they do not follow this simple rule.

It is absolutely essential that you research the position thoroughly. Some grants are reliant upon either jobs being created or investment in new plant and machinery. Others have no restrictions whatsoever and are available purely by making a simple application.

Local Government Assistance

Most Local Authorities offer a range of incentives and grants for businesses to create jobs in their area. Some new businesses overlook this source of funding on the basis that they are creating no new jobs. This is factually incorrect. If you are starting your own business you are, at the very least, creating a new job for yourself.

You should contact the Economic Development Office within your Local Authority to find out what you may be eligible for because there will be some diversity across the UK. To give you some specific examples, however, the following schemes are available from the City of Sunderland Council:

• Rent relief grants – available for between 25% and 50% of the rent payable for the first year of a new lease.
• Basic services grants – a 50% grant is available for the provision of new and essential services including electricity, gas or drainage work.
• Interest relief grants – amounting to 5% per annum for up to two years of the value of loans used to purchase machinery or buildings for industrial use.
• Removal grants – available to cover up to 50% of eligible costs incurred to move to industrial premises in the city.
• Trainee employment grants – grants are awarded to cover 75% of wages of new trainees in the first year and 25% in the second year.
• Exhibition grants – to cover 50% of the costs of exhibiting at a recognised trade exhibition outside the North East up to a maximum of £5,000.
• Commercial Premises’ Improvement and Security Grants – of between 50% and 75% of eligible work on premises in specific regeneration areas of the City.

 

For obvious reasons, all these grants have eligibility criteria, in addition to which they are entirely discretionary. This effectively means that even if you do qualify you may still not receive the funding because the council simply may not have any money left for the scheme.

Central Government Assistance

Through the Small Business Service, the Government offers a number of schemes which can provide assistance in terms of either grants or awards. The three main schemes are:

• Regional Selective Assistance (RSA)
• Regional Enterprise Grant (REG)
• Research and Development Grant.

Regional Selective Assistance

RSA is a discretionary scheme aimed at attracting investment and creating or safeguarding jobs in selected areas of the UK. Grants are available for qualifying projects with total project expenditure in excess of £500,000 and can range from 5% to 15% of the fixed project costs. Each application is individually assessed and the actual amount of the grant will depend on the area, the project, and the number of jobs involved.

Regional Enterprise Grant

REG is also available only in selected areas of the UK and there are variations in the eligibility criteria depending on location. The grant is available up to a maximum of £75,000 on projects which involve up to £500,000 of capital investment. In general, high growth businesses seeking to maximise value added projects with quality output are given a preference.