If you’ve done some research on business funding, you’ve probably heard of grants. But what do you really know about them?
“They’re free money.”
“They’re just for charities.”
“My business isn’t cutting-edge enough for that.”
The lack of awareness surrounding grant funding was one of the main problems we aimed to address at the Business Funding Show 2018. In a dedicated talk, Alex Chalkley and Tom Kennard of Granted Consultancy gave attendees a fresh perspective on what grant funding is and how they might obtain it.
Like most forms of business funding, grants are surrounded by many myths and misconceptions. One of Granted’s tasks as a consultancy is clearing up these misunderstandings so they don’t hinder a business’s success. Let’s have a look at some of the aspects of grant funding that Chalkley and Kennard’s talk helped clarify.
What exactly is a grant?
A grant is a form of funding that ‘will not ask for any equity or debt’ and may cover up to 70% of your project costs. They range in value from about £25,000 to €2.5 million and are typically awarded for a specific project of 6 months to 3.5 years in a specific sector. Organisations, often government ones, offer these grants to speed up innovation in the economy by helping entrepreneurs develop new technologies more quickly and fully.
Grants are not only for startups and charities.
While many grants aim to help new companies develop their technology and business model before it goes to market, many grants are awarded to more established businesses undertaking new product development. If you’re an established company looking to build on what your offerings and differentiate yourself from the competition, consider these options.
Grants are perfect for risky R&D.
Unlike most equity and debt funding, grant funding is meant to offer businesses the room they need to try developing new, risky technologies. If you’re not sure your project will work but can explain how your business and the world at large could benefit if it did, grant funding may be perfect for you.
Brexit will not be the death of grant funding.
Brexit could affect access to EU grants, but the UK government is working to ensure that UK tech businesses remain strong and grow stronger in the wake of separation from the EU. To that end, the Innovate UK budget is expected to quadruple over the next few years, creating new opportunities in grant funding.
You don’t have to fit the grant sector exactly to qualify.
You don’t have to be developing autonomous vehicle tech to apply for an autonomous vehicle grant. Consider how your tech could underpin and be utilised in the supply chain of autonomous vehicles (or healthtech or clean energy or space tech or any other cutting-edge tech). Adhere to the grant criteria, but also think creatively about them.
Grants come with a few strings attached.
It’s true that grants don’t need to be repaid and the funder takes no equity stake in the company. However, grant recipients are expected to provide a project plan that includes all the necessary key performance indicators (KPIs). You are free to set these milestones and deliverables over a period of time and to your own budget, but there will be a monitoring officer and regular progress reports.
You can reclaim some money already spent developing your business.
Grants are generally not retroactive, R&D tax credits are. If you’ve put money into developing innovative technology for your business, you can claim tax credits covering up to a third of the costs.
To make a successful grant application:
Applying for grants can be long, arduous process, but the potential payoff is worth the effort. If you are chosen as a grant recipient, you will not only win (almost) free money for your business but also be in a much better position to attract investors for future rounds of funding.
Stay tuned for more coverage of our full day of panels and talks to get expert advice on choosing the right investor, utilising your business’s intellectual property, and more.
The Business Funding Show began as the first exhibition in the UK and EU focused exclusively on business finance. Today, in addition to the flagship exhibition, BFS runs a series of events throughout the year aiming to educate entrepreneurs on different aspects of business finance and connect them with top funders.
To attend other exciting BFS events, such as funding exhibition, workshops, and networking parties and secure your tickets, visit bizfundingclub.com/events