Grant funding: what you need to know

May 25, 2017 9:31 am

Ever wondered how to identify and win grant funding for your business and how it all works?  This useful follow-up to last month’s post on grant funding explains a bit more about the process and a few of the technicalities.  Thanks to the D2N2 Growth Hub for sharing this information at one of their recent events.

What type of costs?

Basically, there are two major types of costs: capital and revenue.

Capital costs typically include the purchase of assets – examples include equipment, premises and other items that would appear on your balance sheet.   Moreover, other intangible assets are also included, such as intellectual property (IP), software.  Also asset finance where the asset is owned at the end of the agreement.

Revenue costs typically appear on your Profit & Loss account, e.g. marketing and Research & Development (R&D).  However, in certain cases, R&D can also be capitalised.

State Aid

There are EU restrictions on how much grant funding can be accessed by each business and exclusions around certain sectors.  The understanding here is that financial assistance could distort competition and cannot be used to support unproductive industries.  Whilst an EU concept, it is likely that this, or something very similar, will continue to apply even after Brexit.  Different limits apply depending on the industry, geographical location and the size of business.

Throughout the UK, certain areas are designated as having assisted area status.  You can find out more here.

There are two different ways of navigating State Aid and different projects can use different routes.  So, it’s important to choose the best route for your business as you cannot use both.

  • General Block Exemption Regulation (GBER) – the following maximum intervention limits apply:
Company size Assisted area Non-assisted area
Small 30% 20%
Medium 20% 10%
Large 10%
  • De Minimis – any business is unable to receive in excess of €200 grant funding in any 3 year period.  Furthermore, this limit is reduced to €100 for the road freight and transport sector.

The application process

Whilst each grant’s application process is different, each funder is likely to be looking for outputs.  So it’s important that you understand what the funder wants in return for their financial investment.  Here are a few things to bear in mind:

  • Work out the intervention rate (grant/total cost %) – is this in line with any limits?
  • Cost per job created – does this fit with the guidelines?
  • Location of the project – is it an assisted area?  This is usually in a fixed location and not mobile.
  • Does what you are proposing fit in with maximum and minimum grant levels and project sizes?
  • Remember to check State Aid limits.
  • Remember to send all the documents required.  Some funders will provide a checklist.

Further information

If you missed last month’s introduction to grant funding, you can check it out here.  We offer our own range of grants and also information on other local opportunities.  If you would like to talk it over, please contact us.  Alternatively,  Mansfield and Ashfield 2020 are organising a morning event to explain more about the local grant funding opportunities available.  Why not come and meet us (and other funders) there?  Find out more here.  At the end of the information session there will be also an opportunity for one-to-one sessions with each of the funders.

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