Business growth is almost entirely dependent on healthy cashflow. Research from the Federation of Small Businesses (FSB) shows that more than 35 per cent of small businesses to run into cashflow difficulties, forcing one in three to use their overdraft facilities.
At the more extreme end of the situation, cashflow issues can cause businesses to fail. The FSB estimates that this issue has caused more than 50,000 businesses to close annually.
Access to finance through rigid bank loans or expensive P2P loans may help, but when it comes to refinancing growth capital, SMEs face yet another barrier.
Small Business Grants is a new monthly competition from SmallBusiness.co.uk, offering a monthly £5,000 grant to small businesses at least one year old with a turnover between £50,000 and £500,000.
The free-to-enter scheme offers a cash grant, which doesn’t have to be paid back, to a leading SME every month. The criteria are as follows: If you run a small business that was incorporated at least one year ago, are actively trading, and your turnover is between £50,000 and £500,000, you are eligible to enter.
Shortlisted candidates will be assessed by a panel of independent judges, made up of prominent entrepreneurs and industry authorities.
“For years, our readers have been asking how they can get hold of grant funding, and while there are a few initiatives out there, they often require applicants to jump through hoops to get the money they need to invest in growth,” says SmallBusiness.co.uk editor Ben Lobel.
In recent years, it has becoming increasingly difficult for SMEs to find and apply for grant finance. While there used to exist government initiatives that gave small companies a lifeline early in their development, now they are few and far between.
Private grant offerings don’t fare much better in providing a wide range of opportunities, explains Lobel. “All too often, the grant sources that do exist require applicants to jump through hoops to get hold of much-needed growth capital.”
Niche grant schemes, like the Shell LiveWIRE programme, have propelled a handful of SMEs forward. Terence Chung’s cosmetics company FRUU was nearly entirely funded thanks to £2,000 of his savings until he came across the initiative, which awards £5,000 in funding to companies prioritising sustainability in their operations.
“I discovered the programme while watching Dragons’ Den and found out that one of the successful companies on the show had won the award,” Chung says. “Although I have always wanted FRUU to be as sustainable as possible as a business, I did not realise there was grant support available specifically for sustainable enterprises.”
Adam Carnell, founder of Yorkshire web-to-print business Instantprint, was able to find assistance through the public route. His business was funded via Sheffield City Council through Round 5 of the Regional Growth Fund (RGF).
“The application process was very long and detailed with multiple stages. We had to produce detailed forecasts for the next five years, including job numbers and the salary levels for these positions, as well as the usual P&L and balance sheet,” he says.
For businesses looking to achieve a grant, Carnell recommends getting an adviser with experience in grants and ideally a working relationship with the governing body involved.
“This gave us an incredibly useful insight into the system, processes, and preparation required to successfully apply for a grant.
“Also, be patient – very patient. You have to be prepared to put significant time into getting the funding and producing extensive documentation.”
But does applying for a grant have to be all that complicated and tedious? Lobel disagrees. “Small Business Grants offers monthly cash to leading small businesses of any sector, no strings attached. All you have to do is fill in a single application form to give yourself a chance of winning. It really is as simple as that.”
Apply for the Small Business Grants initiative by clicking here – it’s just a single form and no business plan required.