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Small business grants: everything you need to know

7-minute read

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Sam Bromley/Catriona Smith

Sam Bromley/Catriona Smith

11 April 2023

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Finding small business grants in the UK can require investigation, with eligibility depending on a whole range of factors. That being said, it’s not impossible to find sources of small business funding you don’t have to pay back.

Here’s a list we put together to help take some of the initial research effort out of applying for a grant.

Government grants for small business

This guide gives an overview of a range of small business grants, both from the government and other organisations across the UK.

You can jump straight to the government grants by following these links or keep reading for the full list of grants available for small business owners:

Innovate UK

Innovate UK provides government grants to “develop and realise the potential of new ideas, including those from the UK’s world-class research base”. Read about the Innovate UK grant.

R&D tax reliefs

Research and Development (R&D) tax reliefs support companies seeking to research or develop an advancement in their field (even if the project is unsuccessful). This means you can reduce your tax bill by claiming relief on things related to the research project, including staff wages, and project materials, and utilities.

You can claim R&D tax relief if you have:

Our guide to R&D tax relief explains more about what an R&D project is, as well as how to claim tax relief for it.

You can ask your local authority about grants for small businesses available in your region and funding specific to your industry.

Grants for unemployed entrepreneurs

Although there’s no grant available, if you claim Universal Credit (UC) you may be eligible for a 12-month start-up period. This just means that your UC payments will be based on your self-employed earnings and you don’t need to look for other work. Our overview of self-employed benefits explains more.

You’ll also get support from a specialist work coach who’s experienced in working with self-employed people.

It’s also worth looking into whether a Start Up Loan would be helpful if your business is less than two years old.

The government has more information on moving from benefits to work and starting your own business.

Grants for taking on an apprentice

You can get financial help from the government to train an apprentice in your small business.

If your pay bill is less than £3 million a year, you won’t pay the apprenticeship levy. This means you get five per cent towards the cost of training and assessment for your apprentice, if the apprenticeship started on or after 1 April 2019.

The government pays their 95 per cent share directly to the training organisation. You also pay your share directly, according to a payment schedule you agree with the training organisation.

Use the government’s enquiry form to ask the National Apprenticeship Service about the funding available.

Apprentice working in bicycle repair shop

Grants for installing high-speed broadband

Businesses in rural areas may be eligible for vouchers towards the cost of installing new gigabit-capable connections. Vouchers are worth up to £3,500 for businesses

Find out more about the gigabit voucher scheme and check if you’re eligible.

Air quality grant schemes

The government has made funding available to some local authorities in England that are introducing clean air zones. Make sure you keep up to date with the new low emissions zones in UK cities. And you may be eligible for a grant to support your business with upgrading your vehicles or paying for the new charges.

Find out more about the air quality grant scheme.

How to apply for government business grants

The application process will vary depending on the grant you’re applying for, however here are some general tips to get you started:

  • talk to the body awarding the grant – find out what they’re looking for and tailor your application to the objectives (for example sustainability or job creation)
  • write a thorough business plan
  • explain how you’ll use the money – be specific here and show how the funding will help you grow your business
  • apply early – some grants have a limited pot of money so it’s always worth getting your application in as early as possible
  • create a cashflow forecast – this is useful for managing your business finance and is sometimes needed when applying for finance (although more commonly with loan applications)

Just starting out as a small business owner? Make sure you read our guide to starting a business and don’t forget to organise business insurance.

If you're looking for financial guides and resources for your business, visit our cost of living support hub.

Grants to help you start or grow your business

Simply Business runs an annual competition to support small businesses to set up or grow their business. Business Boost gives away a cash grant to one winning business that captures our judges imagination.

Our 2022 winners were awarded £25,000 for their ethical underwear business.

You can register your interest now and be the first to know about how you can win funding for your business.

New business grants for startups

A range of startup business grants are available depending on the sector you want to go into. For example:

The National Lottery Heritage Fund

This fund supports heritage projects ranging from designed landscapes to cultural traditions. The National Lottery Grants for Heritage 2022-23 is prioritising projects that promote inclusion, boost the local economy, encourage skills development and job creation, and support wellbeing.

Learn about the National Lottery business grant.

There’s also the Innovate UK grant and R&D tax reliefs from the government, as we mentioned earlier.

Small business grants for young people

The Prince’s Trust supports young people aged 18 to 30 to start and run their own business. Besides funding and resources, they also provide training and mentoring.

The Prince’s Trust runs an Enterprise Course, which involves info sessions and workshops to help you launch your business. You can apply for low-interest business loans between £500 and £5,000, and the Prince’s Trust says small business grants may be available in special circumstances.

If you’re an entrepreneur who’s building a solution to social problems in the UK, check out UnLtd awards. If you’re 16 or older, willing to participate in learning, and working for the benefit of others, UnLtd could help you start out. They offer awards from £500 to £15,000 across two separate startup packages.

Wondering what mentoring is all about? Read our article on the benefits of having a mentor for your small business to learn more.

Just starting your business? Read our side hustle guide for students to help plan where you want to go with your business and what funding you might need to get started.

Where can I find small business grants in the UK?

Other financial help available to your small business will depend on where in the country you’re located, the size of your business, the industry you’re in – and whether you’re looking for business startup grants or funding to grow your business.

You can use the government’s Finance and support for your business online tool by selecting the ‘grants’ tick box. You can also filter by how long you’ve been trading (useful if you’re only looking for startup business grants), industry, number of employees, and region of the UK.

There’s also more information on the grants available in the different nations of the UK on the following portals.

Small business grants for female entrepreneurs

A Simply Business survey of over 900 women business owners found that 45 per cent would like greater access to business funding to overcome the barriers they face.

There are some grants and awards aimed at female business owners, including:

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Small business grants in England

The Local Enterprise Partnerships (LEP) Network website lists the 38 regional Growth Hubs. They’ve been set up to provide business funding, support and guidance in their local areas.

They make it easier for business owners to find the support they need by bringing together all of the available national and local business support in one hub.

You can search for business support available in your local area on the LEP Network website.

Small business grants in Scotland

If you’re based in Scotland, you might be able to apply for a business grant from Scottish Enterprise.

A funding model was introduced in 2021 that’s designed to be “simpler and more inclusive”. It also aims to help “create jobs and promote a greener economy”.

The Scottish Enterprise website also has details on funding for businesses affected by coronavirus, as well as information on grants that are available from other organisations.

Small business grants in Northern Ireland

The Established SME Funding section of Enterprise Ireland lists several ways you can get financial help for your small business if it’s already up and running and you’re based in Northern Ireland.

It also offers High Potential Start-up Funding if your business idea has “the potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in sales within three years of starting up.”

Small business grants in Wales

If your small business is located in Wales, you can use the Welsh government’s Funding Locator to find and apply for various grants. Sources of funding include:

  • the Welsh Government
  • the UK Government
  • local authorities
  • charitable organisations

Small business training grants

While not strictly a grant, the government does offer funding for training through the National Skills Fund. Eligible adults can access free Level 3 training courses, from horticulture and hospitality to business management and digital skills.

You could also look into free courses, for example in bookkeeping to help you run your business smoothly.

If you’re a larger company, the Help to Grow managementscheme is government-funded and offers free training in management.

Two people working in a plant shop

What’s the difference between a small business grant and a loan?

A small business loan is money for your business you’ll have to pay back within an agreed timescale. This is different to a small business grant, which you won’t be expected to pay back.

Some grants will be offered on the basis that you must also invest the equivalent amount in your business. For example, if you’re given a £10,000 grant, you’ll need to have £10,000 to invest too.

Small business funding

If you’re looking for small business funding but aren’t able to access the grants we’ve mentioned in this article, you may also want to consider:

Remember, business finance is a complex topic, so it’s important to speak to a professional financial advisor or accountant if you're not sure of anything.

What’s been your experience of getting funding for your small business? Let us know in the comments.

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Photograph: VadimGuzhva/
Sam Bromley/Catriona Smith

Written by

Sam Bromley/Catriona Smith

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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