There are thousands of grants and low interest loans available for small businesses. The problem is finding out what they are and whether your business qualifies. Some fields are more liberally provided with grants than others. For instance, the Crafts Council has a setting-up scheme which allows selected craftspeople to receive a grant of £2,500 for maintenance and up to £5,000 for equipment (they pay half of equipment costs), provided they apply within two years of setting up. While this would not cover your start-up costs entirely, it could certainly be a very useful addition. Other areas where grants may be forthcoming include :
Business ventures related to the Arts (and certain crafts) Many regional Arts Councils provide grants/loans to people just starting work in the arts, or to specific projects. The criteria vary from area to area. In one part of the country, for instance, grants may only be available to those working in the visual arts. In another part of the country, there may be grants for those working in a wide variety of arts-related fields. In some areas, the main thrust of the grants may be to encourage artists — or craftspeople — to market their work more aggressively. Other areas may be more interested in providing training. Grants on offer can range from several hundred to several thousand pounds. You can find out more about what’s available in your area by contacting your regional Arts Board or Council. The Arts Council of Great Britain will be able to tell you which is your nearest. Keep an eye out too for any grants being advertised in arts, crafts, or media sections of newspapers and magazines. The Arts Funding Guide, available from good libraries, has a comprehensive list of available grants for those working in the Arts.
Business ventures related to tourism In certain areas — particularly Wales and Scotland — there may be grants/loans available for people who wish to set up projects that will attract tourists. Bed and breakfast accommodation could well qualify, as could specialist tours — although the exact criteria vary from year to year. If you live in Scotland or Wales, contact the relevant Tourist Board. In England, the DTI has regional enterprise schemes for projects creating employment.
Grants for farmers are sometimes offered by the Ministry of Agriculture, Fisheries and Food for those who are planning to use their farms for uses other than farming — and are in environmentally sensitive or otherwise specially designated areas. Check with the Rural Development Commission.
Business ventures for young people Livewire, sponsored by Shell UK, is a competition for entrepreneurs aged 16-25, with prizes for those who win at regional and national level. Business advice is offered as part of the award, but you may also win a cash prize of several thousand pounds.
The Prince’s Youth Business Trust offers a mixture of loans and grants to people under 30. There are discretionary grants of up to £1,500 for equipment, as well as start-up loans. The Prince’s Trust also provides ‘go-and-see grants‘ of up to £500 for those under 26.
Business ventures in rural areas The Rural Development Commission gives grants for turning unused rural buildings into productive work areas, e.g. turning a disused barn into a workshop. However, they will not fund more than a quarter of the cost.
Business ventures in areas of high economic deprivation Certain areas have earmarked funds to establish new businesses — although they tend to favour those businesses that will create jobs. Your TEC, Enterprise Agency, or Business Link will have details of whether there are local grants and what you need to do to qualify. It may also be worth talking to the Economic Development Officer at your local district or county council, as there are many regional grants. For example, both British Coal and British Steel offer low interest loans in areas that have been affected by pit and steel closures.
The Royal British Legion also has a loan scheme for former servicemen and women who are currently unemployed, but want to start their own business. The application has to go through the local branch, but more information is available from the Royal British Legion Village.
If you need vocational training (or want to train someone else) before you start your business, you may be interested in a Career Development Loan or Small Firms Training Loans, which are government schemes run through Barclays, The Co-operative and Clydesdale Banks. This is a low interest loan for training lasting up to a year. Your TEC or LEC will have more details.
The Government also runs a Loan Guarantees for Small Business scheme for people working in various fields who are unable to get a conventional loan, due to a lack of security or track record. This guarantees a loan at a considerably lower rate of interest than would be provided by a bank. However, it is only available to businesses which have been going for more than two years and which fulfil certain criteria. For more details contact the Department of Trade and Industry.
These are just a few of the grants and loans currently available — although the number and type change all the time. Your local TEC, your bank’s small business advisor, the local chamber of commerce and your professional association may know of others that could be made available to someone in your line of work. Many charities also give grants and it is worth taking a look at the Directory of Grant Making Trusts, available in major libraries, if you think your project might attract charitable funding.
The National Westminster Bank also has a very useful small business information directory, available to those who complete their free business start-up forms.
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