The Government Actuary’s Department (GAD) has published a guide to financial support for smaller business
What is a Grant?
A grant is a payment provided by either the Government or a private organisation for a specific purpose.
Where it differs from any other form of finance is that you don’t have to pay it back. Nor do you have to give away a share of your business in exchange.
There are many business grants available across the UK, with over 70 government grant schemesLink opens in a new window alone in operation at the time of writing (March 2021). Some business sectors – such as energy, export and innovation – are particularly active and offer a range of options.
How are grants paid?
It depends on the specific grant you’re applying for. You might:
- receive your grant as a single lump sum upfront
- be reimbursed after spending your own money
- need to match the value of your grant before you receive it
Grants usually have very specific eligibility criteria. These can vary, but often take account of things such as:
- the size of your business
- where you’re based
- the sector you’re in
- what you’ll use the grant money for
What is a Business Loan?
Business loans are very common and one of the first options for businesses looking to raise finance. The lender provides money that you, as the borrower, pay back, with interest, over an agreed period.
Types of business loan
There are many types of business loans available in the UK. They range from short-term to longer-term loans, and can be either secured or unsecured.
Secured business loan
With these loans, you’ll need to use an asset from your balance sheet as security. The lender may also consider third-party security, such as a guarantee, instead of or alongside other security.
Usually, property is used as security, although other assets like stocks and shares can be used too.
Unsecured business loan
This allows you to borrow without using any business assets as security. Often, you’ll need to provide a personal guarantee that says you’ll pay back the loan personally if the business can’t.
Unsecured loans typically have higher interest rates than secured loans.
Funding Support & Guidance
Lisa and the Economic Development team here at Welwyn Hatfield Borough Council can offer some guidance of organisations and sources of business finance funding.
You may also want to seek out a business consultant who can help you to put together plans for your business start-up, or business growth.
These local organisations can also help: