UK SMALL BUSINESS FUNDING FAQ

What is a grant?

To the naïve, a grant is the holy grail of small business funding - a non-repayable handout. In truth, however, grants are more specifically defined.

A grant is a form of assistance - typically financial - which is non-repayable. A grant is awarded to a business to encourage them to undertake or continue activities which, without funding support, they would be unable to undertake. Alternatively, a grant is awarded to persuade a business to refrain from specific activities.

How does a grant differ from other small business funding models?

A grant differs from other funding models primarily because the grantors (the organisation giving the grant) decision to provide funding is made without the need for direct commercial gain.

Are there millions of pounds worth of grants available in the UK?

It is true to say that there are millions of pounds worth of grant funding available in the UK, it is not true to say, however, that any grant is available to any business.

Each grant is established to provide a specific business model with additional funding. To even be eligible to apply for a grant, a business must meet the strict criteria of that particular grant. Even if successful, a grant is unlikely even to meet 50% of project / business costs.

What is a business loan?

A business loan is a traditional form of funding, which can be used for a variety of reasons, including:

starting a new business

purchasing an existing business

refinancing an existing business

What is the difference between a business loan and a personal loan?

A business loan works in exactly the same way as a personal loan in that you borrow a set amount of money which is repaid over a set timescale at an agreed rate of interest. The only difference is that it is the business doing the borrowing, not the individual.

What is the main benefit of a business loan over other types of funding?

Whether it is to alleviate cash flow problems or fund future activity, a loan can provide a business with instant funding.

What funding does the UK Goverment offer?

The Goverment is a considerable source of small business funding and assistance in the UK.

Although very little funding comes directly from central Goverment, one of the UK's major sources of funding are Goverment-established organisations and local Goverment authorities.

Through various organisations, the UK Goverment provides a wide range of small business assistance and funding.

Goverment-backed small business assistance and funding available includes:

grants

loans

development support

training

advice

Is European funding on offer for a small business?

Both the European Union (EU) and the European Commission (EC) provide small business funding.

Like the UK central Goverment, the European Union and the European Commission is not a direct source of funding. Funding is allocated to each eligible country then passed over to the national Goverment for re-allocation.

UK Business Finance, sponsored by UKCashflow24

This guide to UK Business Finance is sponsored by UKCashflow24.

UKCashlfow24 are one of the UK's leading business finance companies.

Whatever your trading status, UKCashflow24 can offer you a host of business finance options including business loans, factoring, invoice discounting, lease finance, commercial property loans and asset finance.

Regardless of the circumstances of your business, UKCashflow24 will explore all avenues to provide you with the best business finance solution.