The funding landscape is vast and extends much further than bank loans and equity investment. For entrepreneurs and business leaders based in the UK, there are over 140 alternative funds that can be accessed to help accelerate business growth, improve processes and help your business grow more sustainably and efficiently. The money can be invested in people, processes or growth strategies, like marketing and building sales funnels. Alternatively, you might raise money to bring in a NED or mentor who brings about a new wealth of experience.
Here are some grants and sources of free cash you may not have already heard of, and how to go about sourcing them:
R&D tax credits
The UK rate of corporate tax (on profits) is already at a historical low of 19%, but for companies that invest in risky or novel ideas that relate to their products, services or processes, further discounts or even refunds are allowed. R&D tax credits are particularly generous for small to medium-sized businesses with under 500 employees. Effectively, they allow the claiming company to multiply their relevant costs by 2.3 for accounting purposes only and go back and reclaim the last two financial years.
This is by no means an easy process and certainly not automated like pay and sales taxes; however, the government is very keen to see new and growing companies undergo the application process and they see, on average, £6 in additional taxation raised over time by the companies that have reclaimed R&D for everyone £1 they paid out.
Innovation Vouchers are offered through Innovate UK, an official agency for the UK government. There are several funding programmes and grant initiatives. Innovate Vouchers are one of the key sources of free cash: they provide a relatively small but useful government grant to develop an innovative idea or new product by giving you expert know-how. Innovate UK will provide you with £5,000 and access to its network, to help you source an adviser, mentor or coach from sources like universities and FE colleges, consultancies and catapult centres and research institutions.
Launchpads have also been a part of Innovate UK since 2016. The Launchpads’ funding competitions run three times each year, and are for companies looking to turn new, innovative and exciting ideas into viable commercial projects. To be eligible, you need to be an SME in the early stages of development, working in the technology industry and be in a relevant geographical cluster. Through Launchpads, entrepreneurs can win up to £100,000 providing they are able to match the initial investment through private or self-funding.
The FedEx Small Business Grant
Initially arriving in the UK in 2016, the FedEx Small Business Grant is a general funding award being offered to UK-based SMEs, with fewer than 100 employees, that have been in operation for two or more years.
The initial stage of the application requires you to submit details about your business dream and goals to FedEx online. Business plans are then requested from a shortlist of companies, and winners of the grant are later announced. The winner secures a grant of £20,000, with smaller grants of £5,000 are available for two runners up.
Local authority grants for small businesses
Local authorities and local enterprise authorities work across the United Kingdom to provide a range of funding and grant opportunities to businesses in different geographic areas. Some of the key grants to look out for include the Business Start-Up Grant (funding of up to £3,000 available to start-up businesses in Aylesbury Vale, Buckinghamshire), Scheme Enabling Fund (available in East Sussex; the maximum amount to be considered is not listed but the remaining fund size is £600,000), and the Scale Up Coaching Grants (funding of £1,000–2,500 can be secured for any business based in West of England to hire a coach). There are 88 other funds in the regions of England, Scotland and Wales.