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How to get free business grants

Business grants are available from the government, the European Union, local authorities, and charitable organisations. Grants are different from start-up or expansion loans, as they are offered to businesses for free and usually do not need to be repaid. Understandably then, obtaining a grant is difficult and businesses will often have to meet very specific criteria to be considered.

Criteria for grants

A number of factors contribute to whether certain businesses will be awarded grants from the government and associated bodies. These factors include the type of business, its location, the size of the workforce, and the purpose of the grant. Certain types of industries are often more eligible to receive funding than others. Likewise, a small business with less than 250 employees, may have a better chance of securing a grant, especially if it's to finance a specific project.
Starting up a business in a deprived area may also be beneficial, as national and local government are keen to stimulate economic growth in these regions. Aside from this general criteria, applicants should bear in mind that government funding is provided for a specific and future project only. Therefore, a project which has already started, will not normally qualify. Applicants shouldn't expect 100% of their business or project to be funded by the grant either. Business owners are required to contribute at least 40% of the total cost.

Application process

The application process for the grant must be followed by a letter, in order to increase the applicant's chances of success. Applicants must prepare a detailed proposal, including costings and a summary of the project's benefits. They must also indicate their relevant experience and demonstrate that they have the money to finance part of the cost. Before applying, it's a good idea to speak to the organisation responsible for administering the grant directly and double-check what they are looking for.
A business advisor, bank manager or accountant may also be able to help a company with preparing the relevant information. It can often take a considerable time for a grant application to be processed, so it's important to be patient.

What happens if a grant application is rejected?

Grant applications are rejected for a variety of reasons. Applicants may have provided incomplete, out-of-date, or unclear information. Also, the awarding body are unlikely to give a grant to an organisation, which lacks a feasible business plan, or who can't prove the need for the grant. If a business is turned down for a grant, there are other finance options available, such as bank loans and private financing.

Further information

Detailed information on the different types of grants, and other types of financing, is available on the Business Link website at

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