Something we get asked about, (A LOT!) when talking to business is grants.
A lot of businesses tell us they are put off making a grant application initially because they think it’s hard work. We wanted to share this blog which answers a lot of the FAQ’s we come across when chatting all things grants & funding.
The Yorkshire Powerhouse website also holds a lot of free resource and tools you might fight helpful when starting up or growing your business, and we’ve put links through the blog that you can use to access templates or further guidance.
We hope you find this blog useful, and if you want to chat with an adviser about applying for up to £25,000 in match funded AD:VENTURE Growth Grants, just give us a call on 0845 524 0210 or complete our easy programme registration form HERE
So…..here are some of the most commonly asked questions and answers to help you get started.
I heard grant applications are really complicated?
In truth, grants are no more complicated than applying to any other financial lender, and you would present your case for a grant in much the same way you would for a loan. The added benefit of a grant is that you don’t have to pay it back.
To start the process, you need a sound business plan which should evidence how and why the grant money will increase the growth potential of your company. Grants are usually aimed at delivering growth, innovation or new products to market.
In our experience most businesses that receive a grant think this is a fair price to pay for an injection of capital to sustain their growth plans.
Why is it all about jobs and growth and innovation?
Most business support programmes and grant schemes are designed to help businesses expand and create new jobs. Even where the focus is on improving productivity or increasing exports, for example, the ultimate aim is to help businesses grow, boost the economy and create sustainable growth and employment. This is often linked to development of new products and innovation. Grant applicants will usually need to evidence their plans will create growth through employment, and will be expected to provide details of any jobs created. This is often linked to the funding offer, and can mean full grant cannot be claimed until this is provided.
How can I make sure I put in the best application and not waste my time?
Grant funders want see applications that are likely to be successful, so always discuss your application with your business adviser before you apply. Most organisations offering grants have advisors who can help you through their process. They can advise you on the kinds of things that can be included in your application. This might be considering how your growth meets the criteria for the grant scheme, and ensuring you have presented your best possible case.
This is also helpful when considering a blend of finance options and understanding what to use the different funds for, maximising the benefits of your grant.
Your adviser will act as a critical friend by going over your application, and giving you advice on areas that may need development or more clarity.
Having this support through the grant process will make it more likely your application will succeed.
My business plan is in my head!
While many businesses often start without a comprehensive business plan, when it gets to the finance-raising stage this would be a must for any lender, demonstrating why the company is viable for lending. This usually includes forecasts of revenue, outgoings and activities associated with these, market research, competitors and promotional strategies.
This sounds like a lot of work………how hard is it?
A business plan does not have to be 100 pages!! Our friends at the Yorkshire Powerhouse have written an article extolling the virtues of a one page business plan! Business plans vary as much as businesses do, but they should give a clear line of sight for the business’s financial forecast, sales figures and demonstrate to any potential investor or lender why you are a viable business.
Ok – so how can I get help to develop my business plan?
There are a number of ways you can get help with this, depending on your needs. If you have a plan but need some pointers, regional advisors and support programmes can offer you advice and even feedback. They can’t write it for you, but can advise you.
You can also access workshops, aimed at helping you understand the business plan itself, and events to develop your understanding of essential areas, such as marketing, branding, market research and financial forecasting. Check out some of our FREE events at https://www.ad-venture.org.uk/events
Why can I only spend grant money on certain purchases, it’s confusing!
Grant programmes are aimed at helping companies invest in growth and it’s important to note that most, if not all, will not support what would be considered running costs.
The grant is designed to help make the investment happen – for example, where there’s a shortfall between how much you need to invest and the cash you’ve got in the business or funding you’ve been able to raise from the bank or other lenders. Sometimes, it’s about making an investment happen quicker so that you don’t miss out on an opportunity for your business.
Most grants cannot, however, be used for general day to day running costs or overheads such as rent, wages, energy bills or for buying in stock.
To help, here are some basic examples of eligible and non-eligible spend, with a brief explanation
What is match funding?
Most government grants are match funded. This means the business has to match the grant cash with some of their own. The level of match funding can vary from one grant programme to another.
For example, the Leeds city region ad:venture grant scheme has match rate of up to 50%. This means, in most cases if a business had a project that would cost £20,000, they could apply for up to £10,000 in grant, which is claimed back after the spend.
The match rate can vary depending on the grant, so it’s crucial that you understand what your level of match would need to be. This sort of information would be provided the grant provider or adviser.
Does the match have to be money in the business?
Not always. It can be from cash within the business but it could also be finance raised in other ways, for example, a business loan, external investment, a low rate government loan or even personal or family loan. Your business advisor can also advise you on other financial solutions and products to match with the grant. We work with a range of partners, some who also offer lending solutions including the Business Enterprise Fund. You cannot use money from other grant schemes as match funding, as rules say the business has to contribute.
Why do I have to provide evidence and quotes for purchases?
Most grants require quotes and evidence of final purchase for any products or services purchased using grant money. This is for audit purposes – so it has to be done – and is designed to help make sure you and the grant provider get value for money by testing the market. Where it’s a product, you can easily check the costs of a like for like product. For services, this would usually be done with issue of a spec for the service, with the potential supplier providing a quote or payment schedule.
Grant advisers and local support providers can give guidance on this, and have templates and examples if this is something you need assistance with.
Do I have to buy the cheapest then? What if it’s not the best?
No, the quote process is about due diligence, market fairness and value for money. You may feel one provider is a bit more expensive but their service or product is of a higher standard. You should select based on best value and what is right for your business.
Remember, a percentage of the cash spent is yours too so you want to make sure you have the best price and right product.
We use a basic template that can be used to evidence your assessment, and to make the process easier for you.
Why do I have to spend the cash before I can claim the grant money?
Not all grants work this way, but the majority do, and it’s important to be aware before you apply. The purpose of the grant is to help the business sustain itself financially at the crucial period when an investment has been made and cash flow may be under pressure as a result. Claiming the grant after the money is spent, this ensures you have the injection back into the business at the time it’s most needed. This can be also be done in stages as you spend, depending what works best for you and your business.
Grants & Funding FAQ’s Summary
It’s likely that you will have more questions than we can provide answers to!
The answers above cover the majority of the questions we are usually asked. Take a look at the links and explanations of the various regional grants available by clicking on the grants and funding page on Yorkshire Powerhouse site. You can contact the funding providers with your specific questions, or for businesses under 3 years or new, AD:VENTURE advisors can help you navigate your options, and for those over 3 years, the Leeds City Region LEP have dedicated growth managers who can support you.
A final thought…….if you are starting, running or growing a business , there is a great deal of support out there and you don’t need to navigate it alone. You can also access invaluable non financial support that adds genuine value and clarity to your business. Don’t miss out because you didn’t ask!
Check out some examples of businesses who didn’t miss out here: AD:VENTURE Case Studies
Think BIG…….Think AD:VENTURE
Content by Daneile Moore, Leeds City Region Ad:Venture Programme
Daneile.Moore@leeds.gov.uk Tel: 0113 3788854