Grants

A grant is a cash injection from a government or a charity, given to support particular types of investment or enterprise. It is not lent by a bank and it is not bought by an investor — it is awarded to help pay for something specific.

Grants exist to achieve an aim, so they are usually linked to public benefit or economic stimulus. A fund might offer money to create jobs in a town with high unemployment, to pay for staff training, to help businesses buy greener equipment, or to support a rural community bus service. The funder wants a result for its money, even though the business never repays it.

Why a grant is attractive

A grant usually does not need to be repaid and is often free of interest and fees, so it is much cheaper than borrowing the same amount as a loan. For example, a small climbing centre wants to fit energy-saving LED lighting. A green energy charity offers £3,000 towards the equipment because it wants to cut electricity waste. That £3,000 is never repaid, so the owner only has to find the rest of the cost.

Why a grant is not always the answer

• Eligibility — only certain businesses, in certain places or industries, can apply, so you may find nothing suitable. A fund for staff training is no help if you need new tools.
• Conditions — money comes with rules, such as how it must be spent, where you must be based, how many jobs you must create or how long you must stay open. Break them and you may have to repay the grant.
• Time and competition — applying means forms and evidence such as quotes and a business plan, so it can take weeks or months. When demand is high and funds are limited, there are more applicants than money, so even a strong application may be turned down.