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By miguel-ingles
- In Uncategorized
The British government offers a range of financial aids that especially benefit small businesses. These grant the corporations access to additional funds without having to repay them or conceding shares to investors in return. In this article, I will explain the subsidies for new companies in the UK.
What are the Subsidies for New Companies in the UK?
Grants for enterprises are additional funds that government, supranational entities, local authorities, or sometimes private organizations contribute to companies. They differ from other forms of financing in that it will not be necessary to return the money or to offer any other type of compensation to investors.
British authorities allow grants of up to 100 000 GBP. However, these usually only reach a few thousand pounds. It is therefore common for companies to combine subsidies with other forms of funding.
To access these aids, the organisations require the businesses to meet certain criteria. These usually vary depending on the subsidy to which you want to access, although the following are usually shared.
- Having a specific business size.
- The location of the company’s head offices.
- The economic activity that the corporation performs.
- The uses for which the company will employ the money.
In addition, some grants require the enterprise itself to contribute a portion of the funds and convincing the authorities why the company deserves such financial assistance.
In short, it is essential to review all the characteristics of the grant you want to request to see if it can really benefit the business.
Benefits of Subsidies for New Companies in the UK
Again, the advantages of funding a corporation through grants depend on the specific characteristics of the aid fund in question. However, there are some common benefits, which are:
- It will not be mandatory to repay the subsidy.
- By not giving shares of the company in exchange for investments, the owners will maintain total control of the business decisions.
- Company grants often synergise well with other forms of financing, such as bank loans or equity funding. This is because the interest that the enterprise would need to repay would be lower than if it only used one source of funding.
- Accessing a first grant can increase the chances of receiving additional subsidies. This is because it will improve the credibility and business image of the corporation.
Subsidy Types for New Companies in the UK
Government Grants
The UK government offers grants to help companies in sectors such as job creation or sustainability. They are offered at a national, regional or local level.
An example of government subsidies would be the apprenticeship grants, which support companies during the training process of new employees, covering a portion of their salaries and training costs.
R & D Grants
Businesses that research and develop new products and services can access further support that provide them additional funds for product testing and implementation. They focus mainly on sectors such as healthcare, energy and technology.
Local Aids or for Specific Economic Sectors
Certain grants are only available for specific regions or industries. Its objective is to promote such geographical zones or key economic areas. One case would be the agricultural and rural business grants, which supports companies that are engaged in agriculture or those that are in rural environments.
Subsidies for Global Expansion
These are aimed at corporations that want to expand to international markets. They support businesses on issues such as foreign trade, marketing or export-related costs. An example of this type of grants would be the UK export finance, which economically supports companies that trade internationally.
In any case, the most efficient way to find subsidies that fit the characteristics of a company is through the British Government’s Finance Finder.
In ukstartcompany, you will find information about how to establish, register and operate companies with different legal structures and business activities in the UK.