Grants are one of the most attractive forms of business funding because, unlike loans, they do not need to be repaid — but they are also among the most commonly misunderstood. Many founders believe grant funding is more widely available than it actually is, or assume they qualify without fully understanding the eligibility criteria and application process that most grants require.
A business grant is a sum of money awarded to a business by a public body, charity, or other organisation for a specific purpose, without the expectation of repayment. Grants are typically awarded competitively — applicants must demonstrate that their business meets specific criteria relating to sector, location, stage of development, or the nature of the activity being funded. Grant funding in the UK is available through central government, devolved administrations, local authorities, innovation agencies, and sector-specific bodies, among other sources.
Grants typically require detailed applications explaining how the funding will be used and what outcomes it will achieve. The process can be time-consuming relative to the amounts available. Many grants also require match funding, meaning the business must contribute its own capital alongside the grant. Our guide to business grants for UK founders covers the main sources available and how to assess whether a grant is worth pursuing.