Grants and Awards
From Entrepedia: The Entrepreneurship Wiki
As entrepreneur you can’t build and grow a business all by yourself. You need know-how, financial resources, and other resources such as office and lab space, as well as connections and networks Many early stage funding programs, including grant programs, address this “early stage funding gap”: Identified in the literature as a challenge to startups; governments are attempting to deal with this through new programs. In Europe, there is plenty of experimentation around this issue.
Some of the pros that a grant can offer include the opportunity for free money, in the sense that no equity needs given up, and the chance to expand your networks and find more opportunities. They may also give status to a venture (i.e. SMART awards), and provide a viable alternative to equity fundraising that may be difficult for particular types of startups and new ventures. However, some of the cons might include the time and effort required to go through application process, and the possibility that receiving a grant may provide a false sense of success and a distraction from real market issues. Grants also often come with strings attached that may also be distracting, or worse yet, lead new venture down the wrong road strategically. They may have terms and conditions in the fine print that private investors don’t want to deal with.
Despite the cons, grant funding is almost certainly the most desirable of all the various funding vehicles available to the business sector for the obvious reason that usually grants do not have to be paid back and you do not lose any equity in your business. You should, therefore, check for the availability of any grant before committing yourself to any other form of finance. Grants are available for various purposes from local and central government as well as from the European Community. Research and applications will necessitate communication with civil servants so don't expect to have an easy ride through the formalities! Persistence does, however, pay off and, if you are successful, your efforts will certainly have been worthwhile. This section outlines the principal forms of grant funding and the channels to go through to apply for them.
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Local Government Grants
Local authorities have various statutory powers to grant financial assistance to businesses in their areas where such assistance will help to achieve certain priority objectives in that area. If you can show that your business plans will be beneficial to the local community in some way then you may be eligible to receive assistance. For example, providing employment to local residents, the long-term unemployed or disadvantaged groups, would be serving the community. Some examples are given below:
Start-up Grants
Local authorities will often offer incentives for new businesses to locate in their areas where they feel this will benefit the local community in some way. These grants usually cover all aspects of starting up a new business. For more information contact Scottish Enterprise or the local Business Link.
Training Grants
Grants for staff training covering things like efficiency improvement or expansion. Also your local authority might well be prepared to help you with the costs of training new employees from the local community, especially if you plan to employ people from under-represented groups such as ethnic minorities and disabled people. Many local authorities also run free business training courses for the small business manager. Details of any such schemes will be available from Scottish Enterprise or your local Business Link.
Property Grants
Local authorities may also provide subsidised or reduced rate premises for new businesses to encourage investment in their area. Assistance can include the granting of rent and rates holidays to help new businesses to establish themselves. Rent grants for private sector premises may also be available. Property improvement grants may also be available to help with the costs of repairs, improvements or modifications to business premises. In particular proposals for conversions to premises such as the provision of ramps to allow easier wheelchair access or handrails to assist the visually impaired are particularly likely to meet with approval.
Investment / Research Grants
Some local authorities may offer ‘investment’ grants to assist with the purchase of new plant or equipment, or to help with the expenses involved in the design and development of innovative new products, research and marketing.
Green Grants
"Green grants" are widely provided to enable businesses to help businesses become more environmentally friendly: e.g. improving waste management techniques, reducing pollution, improving energy efficiency, etc.
You should remember that grants are not given to make you rich. Their purpose is to improve the situation of the community as a whole and whether your proposals will achieve such improvements will be the deciding factor.
Central Government Grants
Central Government grants are available to assist business where it will help in achieving certain priority economic objectives. Funding is generally geared towards strengthening the economic position of certain areas of the country which have suffered from serious industrial decline in recent years, and encouraging investment in British manufacturing and technological industries and research and development as well as encouraging British firms to establish themselves in foreign markets. It will also look to create new jobs in British industry.
European Community Grants
Financial assistance from the European Union comes mainly from the various Structural and Regional Aid programs and the European Social Fund.
