3 Incredible Government Funding Schemes Types To Try Now

If you’re a startup or small business owner in the United Kingdom, you should definitely look into the government funding schemes that are available.

One of the easiest times to apply for government funding is now, and there are plenty of opportunities for businesses at all stages, from pre-revenue startups to established companies wanting to recover from the economic downturn and expand.

Interest rates are sky-high through banks, making borrowing money incredibly difficult and expensive; hiring is becoming pricey due to high unemployment rates (more so due to people not wanting to work); it’s all a disaster. All of us really could use some extra cash at this time.

The good news is that the government of the United Kingdom offers a wide variety of programmes to help business owners get back on track and secure necessary funding.

Government Funding Schemesms

It’s important to realise that money for government programmes in Britain originates from different branches of government before diving into the specifics of the numerous programmes available.

Local government funding

To begin, it is usually preferable to seek out support on a local level. This refers to the location where you currently reside, be it your hometown or a nearby suburb. In particular if your company is locally based and serves local clients. Every municipality wants to do its part to help the economy thrive. We classify this sum as money from the state or province.

When it comes to money, local governments typically offer the fewest possibilities, but those funds are typically far simpler to secure.

Regional government funding

From there, you can look into interregional funding opportunities or regional government funding opportunities to broaden your search and increase your reach. If your community is giving money to businesses, it’s because they want to encourage new ventures and expand the regional economy.

In light of the fact that a business owner in one city may reap advantages from other cities and governments within the same region, regional government funding is more readily available. Use another way, your regional government has greater resources to put toward encouraging business growth than your own local government does.

National government funding

Finally, if you’re searching high and low for government funding opportunities, the national government of the UK is worth considering, as it extends to every city and region and typically offers the most choices for entrepreneurs.

Since national governments have access to more resources and can potentially serve a wider range of businesses’ funding requirements, a wider variety of industries, and geographic areas in the UK, they are often the best bet for securing financial backing for a company.

The most effective strategy for securing government funding for a business is to apply for grants and loans at all three levels of government.

To see all available government funding options across the UK, use the Funding Database.

3 Government Funding Scheme Types

Here are the three most important categories of government funding programmes to think about in more detail:

1.       Government Grants
2.       Government Loans
3.       Tax Breaks or Tax Credits

There are a number of subcategories within each of these three types of government funding that offer even more opportunities to secure financing for your business from the government of the United Kingdom.

Government Grants

There are many different types of funding available from local, regional, and national governments, but a government grant is one of the most popular options. Since grants from the government do not typically require repayment, they are commonly referred to as “free money.”

It’s worth noting, though, that there are a variety of government grants available, such as:

•         Non repayable government grants
•         One time and renewable grants
•         Partial contributions

The non-repayable government grants are exactly as they sound – cash given to a business owner to use however they see fit, with no expectation of repayment under any circumstances.

The one-time and renewable grants are options available to business owners who need money for things like renovations, upgrades to equipment, etc., while renewable grants can be used to pay for ongoing costs like salaries and employee training.

The partial contributions are similar to non-repayable grants, but they usually require some sort of down payment or funding directly from the business owner (as well). Depending on the grant organisation, “partial” can refer to any percentage. With a personal investment of the same amount, for instance, an approved partial contribution of £50,000 could be made if you applied for such a large sum.

If you don’t have any capital to invest in your business, the partial aspect isn’t for you.

Keep in mind that while government grants are ideal, they are also extremely difficult to obtain and may not cover all of your funding needs.

Government Loans

Similar to a traditional bank loan, a government loan is simply money you borrow from government agencies, or can often be backed by the government, to help you get your business off the ground.

The various loan types available include:

•         No Interest and Low-Interest Loans
•         Conditionally Repayable Loans
•         Government Guaranteed Loans

The loans, be it a no-interest or low-interest, are very similar to a loan from a regular bank. The money is borrowed from a designated government funding agency and put to use in your enterprise. Loans, interest rates, and repayment schedules can all be negotiated to better suit the needs of your company.

A government loan is intended to help you succeed, unlike a bank loan where the lender only cares about collecting interest.

The conditionally repayable loans are similar to those described above; however, additional conditions are placed and often negotiated to ensure that you, the business owner, make the most of the borrowed funds. You have a better chance of succeeding with these loans than with a bank loan, which typically requires you to start paying back the principal (plus interest) as soon as you borrow the money.

With the government guaranteed loans, the government will act as a guarantor on your loan. This means that they are sharing the risk with you, and that if things don’t work out as planned, you won’t be responsible for repaying the full amount of the loan.

A government loan can be a fast and easy way to get the money you need to start or expand your business.

Tax Breaks and Tax Credits

Free money can be found in a variety of forms, including tax credits and deductions, as well as grants and loans from the government. Since you need to have already spent the money before you can claim it and get the break or credit, government programmes like these are typically an afterthought.

While tax credits are typically issued as a refund in the spring, when most business owners need the money “now,” it is often too late. Many business owners overlook this opportunity, even though it’s on par with a grant in terms of value. However, doing so would be a huge mistake.

To see all government options, including grants, government loans, and tax breaks, see the Funding Database and benefit from expert help and guidance.