Funding and grants
Funding and grants for Bromley businesses.
There are many sources of business funding and finance opportunities, including Business grants and Crowdfunding as shown below:
Business grants – can be administered through local authorities, charities, trusts, and business support organisations.
Crowdfunding (includes equity crowdfunding and peer-to-peer lending)
Personal funds
Debt finance/Bank loans and overdrafts
Credit cards (short-term spending)
Private equity investors (Angel Investment and Venture Capital)
Business Grants
Finding small business grants in the UK can be difficult, as eligibility is determined by a variety of variables. Having said that, it's not hard to obtain non-repayable sources of small business grants; you only need to learn how to get grants for small businesses.
It's no secret that businesses, particularly small firms and new startups, are struggling right now. There is plenty of assistance available in the shape of loans, relief, tax cuts, rate freezes, and small business grants.
However, before we move forward, let's understand the difference between grants and loans for a small business.
What's the difference between a grant and a loan for a small business?
A small business loan is money for your company that you must repay over a set period of time. This is not the same as a small business grant, which you will not be required to repay.
What is the definition of a small business grant?
Government grants come in a variety of shapes and sizes, ranging from cash deposits to tax reliefs. Government business grants can be classified into the following categories:
Equity finance
If a company is less than two years established and has fewer than 25 employees, it may be eligible for income tax and investment discounts.
Grants made directly
When money is given directly to a new business to pay start-up costs such as equipment and employee training, this is known as a direct credit. Many grants will require your company to contribute half of the grant's value.
Low-interest loan
These are usually government-backed and can provide more favourable repayment terms and circumstances than loans offered by banks and building societies. This could result in reduced interest rates or longer repayment periods for your company.
How to apply for a Small Business Grant?
If you're starting a business in the London Borough of Bromley, start with the Business Finance Support Finder. The business finance help for your small business will depend on where you are in the country, how big your company is, what industry you're in, and whether you're considering business launch grants or financing to expand.
Select the 'grants' tick-box on the government's Finance and Support for Your Business website. You may also sort by how long you've been in business (which is important if you're solely looking for startup business grants), industry, staff count, and UK area.
Grants for small business startups
Depending on the industry you intend to operate in, there are a variety of small business grants available.
Smart Grants from Innovate UK
Innovate UK is one of the Small Business Technology Grants. Smart Grants from Innovate UK assist in the development of ambitious R&D technologies that have the potential to have a substantial impact on the UK economy.
Seed Funding for Small Businesses (SEIS)
You've probably heard of this plan. It aids start-ups in raising funds for their venture. You can obtain up to £250,000 in total, including state aid provided in the three years leading up to the investment date.
SEIS (Seed Enterprise Investment Scheme) is a UK government initiative offering significant tax relief to individuals who invest in small, high-risk, early-stage startup companies, helping these businesses raise crucial early funding by making the investments more attractive to private investors through benefits like income tax relief, capital gains tax (CGT) exemption, and CGT reinvestment relief, with the goal of stimulating economic growth.
How it Works
For Investors: You get up to 50% income tax relief on your investment, can be exempt from Capital Gains Tax on profits, and get further relief when reinvesting other capital gains.
For Companies: It helps them raise vital seed funding (up to £250,000) by offering these investor incentives, with funds used for growth, R&D, or hiring.
Key Features
Early Stage: Targets very young, small businesses, unlike the similar EIS (Enterprise Investment Scheme), which supports slightly more established firms.
Risk Mitigation: Higher tax breaks are offered to offset the higher risk of investing in startups.
Conditions Apply: Both the investor and the company must meet strict eligibility criteria, including company age, employee count, assets, and the investor's UK taxpayer status.
In essence, SEIS is a powerful tool for UK startups to get off the ground and for investors to get substantial tax breaks for backing innovative new businesses.
Ascertain that you meet the requirements so that investors can claim and keep SEIS tax reliefs on their shares. If you do not meet these standards for three years after investing, the tax benefits will be withheld or revoked. The funds must be utilized within three years of the initial public offering.
Further sources of funding information:
COBRA Searches – Complete Business Reference Advisor
COBRA contains all the information you need to turn your idea into a business. Log on and find more than 4,000 fact sheets, market reports, contacts, and sources of funding and support, plus hundreds of practical guides to starting up more than 350 types of business. If your library is a member of Ask About Business, you can access all areas of COBRA. Simply click HERE and log in with your library ticket. If you have a library card for any of the Ask About Business member libraries, then enter your library card number. Ideal for anyone looking to start a business, write a business or marketing plan, or conduct research into a new market. COBRA is also available at any ‘Ask About Business’ library with internet PCs.
Crowdfunding
https://www.ukcfa.org.uk/what-is-crowdfunding/
Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money. Traditionally, financing a business, project or venture involved asking a few people for large sums of money. Crowdfunding switches this idea around, using the internet to talk to thousands – if not millions – of potential funders. Typically, those seeking funds will set up a profile of their project on a website such as those run by our members. They can then use social media, alongside traditional networks of friends, family and work acquaintances, to raise money. Below is a brief description of each of the different types of crowdfunding.
To view a list of platforms, please see the Members List.
Donation / Reward Crowdfunding
People invest simply because they believe in the cause. Rewards can be offered (often called reward crowdfunding), such as acknowledgements on an album cover, tickets to an event, regular news updates, gifts, and so on. Returns are considered intangible. Donors have a social or personal motivation for putting their money in and expect nothing back, except perhaps to feel good about helping the project.
Debt Crowdfunding
Investors receive their money back with interest. Also called Peer-to-Peer (p2p) lending, it allows for the lending of money while bypassing traditional banks. Returns are financial, but investors also have the benefit of having contributed to the success of an idea they believe in. In the case of microfinance, where very small sums of money are lent to the very poor, most often in developing countries, no interest is paid on the loan, and the lender is rewarded by doing social good.
Equity Crowdfunding
People invest in an opportunity in exchange for equity. Money is exchanged for shares, or a small stake in the business, project, or venture. As with other types of shares, apart from community shares, if it is successful, the value goes up. If not, the value goes down.
Government Grants business database
Finance and support for your business from the Government
https://www.gov.uk/business-finance-support
For business owners seeking financial support, some sort of debt finance can be a desirable option.
This process involves securing funds from a financial institution and agreeing to repay the borrowed amount, along with any accrued interest, over a period of time. Examples include Start Up Loans, The Growth Guarantee Scheme (GGS), Enterprise Capital Funds (ECFs), The Bank Referral Scheme
Grantfinder (business and community) – a business database to search for business grants available at the British Library
Plinth – AI Grant writing tool for grantmakers, fundraisers, and organisations of all sizes across the charity and public sector.