January 29, 2023


Business leisure

The loans and grants small businesses can apply for now

STRUGGLING small businesses can get support worth several thousand pounds in the form of grants and loans.

It comes as the coronavirus pandemic has hit hard against millions of firms.


We explain where to get a loan or grant if you’re a small business ownerCredit: Getty

A loan is money for your business you’ll have to pay back within an agreed timescale, and you’ll likely be charged interest.

While a grant is cash support that you don’t need to pay back.

Finding grants that you’re eligible for can take time, but it’s not impossible to find sources of funding that you don’t have to pay back.

Michelle Ovens, founder of Small Business Britain, told The Sun: “Many businesses, particularly those forced to close, are able to get financial support from the government or council, so it’s worth reaching out to find out what is available for you.

“The best place to start is the government or local authority website.

“But there is a lot of other support out there too, much of which is free; whether it’s business advice on how to diversify your business, help with cutting costs or support on managing your mental health.”

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Below we round up various types of support depending on your situation.

Government support during Covid

The government has extended plenty of Covid-19 measures such as the furlough scheme, business rates holiday and the reduced VAT rate this year.

It’s also rolled out other support in the form of grants and loans, below we round up what’s available.

Self-employed grants

The self-employment income support scheme (SEISS) supports millions of Brits who work for themselves during the coronavirus crisis.

The fourth grant for the self-employed is worth up to £7,500, Chancellor Rishi Sunak confirmed during the Budget on March 3.

It will cover lost earnings through February, March and April as a result of coronavirus.

The Chancellor also confirmed that there will be a fifth and final grant available covering lost income for June, July and August.

This value of this fifth grant will be determined by a turnover test,
meaning businesses will get different levels of support depending on how severely they are affected.

Applications for the fourth grant will be open from late April, while it’s not yet clear when Brits can apply for the fifth one.

Restart grants

The government’s £5billion Restart Grant for businesses will help companies reopen and get going again following lockdown.

Non-essential retail businesses, which can open in mid-April, will be able to receive grants of up to £6,000 per premises.

Hospitality and leisure businesses, such as gyms, can get up to £18,000, as they will open later.

Bounce back and coronavirus disruption loans

Bounce back loans (BBL) let small and medium-sized businesses borrow between £2,000 and up to 25{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} of their turnover.

The maximum loan available is £50,000.

The government guarantees 100{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} of the loan and there won’t be any fees or interest to pay for the first 12 months.

After 12 months the interest rate will be 2.5{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} a year.

Meanwhile, the coronavirus business interruption loan scheme (CBILS) helps businesses to access loans and other kinds of finance up to £5million.

The government guarantees 80{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} of the finance to the lender and pays interest and any fees for the first 12 months.

Both schemes are open to applications until March 31, 2021.

Recovery loan scheme

Once the bounce back and CBILS schemes close for applications, they’ll be replaced by a new recovery loan scheme.

Loans can be between £25,000 and £10 million, of which 80{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} is guaranteed by the government.

The scheme launches on April 6 and is open until December 31, subject to review. 

Loans will be available through a number of lenders, but the government is yet to announce which ones.

Support from councils

Businesses who aren’t eligible for the government’s restart grants may be able to get cash via their local councils.

For example, the additional restrictions grant (ARG) fund is a one-off discretionary fund aimed at a range of business sectors.

It must be distributed by March 31 2022, or the funds will be recovered by the government, so it’s worth applying for it.

You can find your local council by putting in your postcode on the Gov.uk website.

Then simply click through to the council’s website and search for support for small businesses and follow the instructions on how to apply.

Individual small business grants

The government has a free online tool that lets you search for grants and loans available to small businesses.

You can filter your search by business stage, industry, number of employees and region to find the ones most relevant to you.

There are currently 66 grants listed on the government site, with some worth hundreds of thousands of pounds.

There’s a strict eligibility criteria though, and plenty of them require you to live in – or plan to move to – a certain region.

For example, entrepreneurs in Scarborough can get up to £5,000 to help develop their business.

While West Midlands-based businesses conducting commercial operations in Birmingham could get up to £171,000 to upgrade their vehicle fleet.

Below we’ve rounded up other individual grants available to small business owners across the country.

Innovate UK Smart Grants programme

Innovate UK Smart Grants helps deliver research & development innovations that could have an impact on the UK economy.

The current round of funding is open until May 26, 2021.

Grow It Award

This grant is one for entrepreneurs who aim to solve a social issue.

You can apply for up to £15,000 to help you grow along with a support package of one-to-one coaching, training, mentoring and access to networks.

The Grow it Award is focusing the funds on building access to employment and finding solutions for an ageing society.

New Enterprise Allowance

This government grant is for unemployed people who want to start their own businesses.

Talk to your Jobcentre Work Coach and if you’re eligible you may get a weekly allowance worth up to £1,274 over 26 weeks as well as a mentor.

You can also get it if you’re self-employed and on Universal Credit but you won’t be entitled to the weekly allowance.

Community Shares ReBoost Fund

The Community Shares ReBoost Fund helps community businesses raise capital that can support their recovery following Covid-19.

Apply for between £3,000 and £5,000 in development grants or you may get match equity investment, which is typically matched up to £25,000.

The latter would match the amount raised by supporters of your business.

The fund is open for applications until April 2021.

National Lottery Heritage Fund

This fund gives out grants worth from £3,000 up to a whopping £5million to heritage projects ranging from designed landscapes to cultural traditions.

The grants for 2021-22 will prioritise projects that boost the local economy encourage skills development and job creation.

You can learn more about the support on offer and how to apply on its website.

Small business loans

Check with your bank or other lender

The most common way of getting a business loan is through a bank, with around a third of small firms applying for them, according to the British Business Bank.

However, you may find that the interest rates are over 6{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} and come with complex application requirements.

You can compare business loans by using a comparison site such as Go Compare or MoneySuperMarket.

They list lenders – big and small – and the kind of loan you’ll be given.

Start-Up Loans

Small business owners can also apply for a government-backed Start Up Loan worth £500 to £25,000 to help start or grow their business.

You also get access to a mentoring network providing free support and advice.

Unlike a business loan, this is an unsecured personal loan.

It means you don’t have to put up your assets as security to back the loan, whereas other loans may require your home as a security.

Instead, the lender will approve the loan based on your creditworthiness.

Just keep in mind you’ll have to pay a fixed interest rate of 6{540ccc4681f92a8237c705b0cdebbb9da373ec200da159e6cc1fd9f393be00be} per year.

You can repay the loan over a period of one to five years, and there’s no application fee and no early repayment fee.

What to keep in mind if you’re applying for a business loan

IF you’re keen to take out a loan for your business, we explain things you need to keep in mind.

Eligibility for a loan will depend on your personal financial situation as well as that of your business.

As with any other borrowing, the lender will look into your credit history, but they may also want to see a business plan or accounts.

In other words, you need to make sure your finances are in order before you apply for anything.

To apply for a business loan, your business will usually need to be VAT registered and there may also be a minimum monthly turnover.

Some providers may also require that you have at least two years of filed accounts, although not all lenders will.

From start-ups to small businesses, we share tips on how to manage working from home during Covid.

Last month, 1.4million businesses were given more time to pay back Covid bounce back loans.

Meanwhile, hundreds of thousands of small businesses could receive a payout from insurers if they’ve been hit by Covid after a legal ruling.

Stacey Solomon sobs reading thank you letters from small businesses she’s helped