What is Grant Funding?

Grant funding is where an individual or organisation receives a sum of money from a third party, such as a foundation or a government. It can be made available for a variety of different reasons but always provides a form of cash flow that does not have to be repaid. There are lots of benefits to being able to obtain grant funding, from the financial income to the opportunities it opens up for collaboration.

The different types of grant funding

There are generally two types of grant funding available: capital grants and research and development grants. A capital grant is designed to cover the cost of specific items, such as equipment and buildings. The idea behind a capital grant is to enable more impactful projects to be created by taking away the pressure on capital expenditure. Research and development grants are slightly different in that the cash is provided for a specific purpose, aim or project. This type of grant is typically used to support high-risk technology projects that have a lot of growth potential.

What kind of funding is available?

Most grants are paid out in arrears, which means that expenses need to be paid for upfront and then recouped under the grant. The amount of the costs that a grant will cover usually depends on the grant. If it is a capital grant then this will usually be somewhere between 20% and 40% of project costs. For a research and development grant, it could be anywhere from 50% to 100%.

Find out what grants you can apply for by using our Opportunity Checker.

Why apply for grant funding?

There are lots of benefits to successful grant funding, including:

• This is non-dilutive funding – This means that there is no requirement to give away equity in the business in order to obtain the funding. As a result, no control is lost.
• Obtaining grant funding can boost what can be achieved by a project and also accelerate time to market – This is a huge advantage for any organisation looking to be first-to-market with a specific product or service.
• Grants don’t involve any debt – So, there is no interest to consider and no requirement to make repayments either.
• Grants can open the door to collaboration with expert partners – This can provide access to expertise and insights, as well as networks and technologies.
• There is the potential to have a big impact – Grant amounts are typically between £50,000 and £4 million so the funding received can be truly transformative.
• Grant funding can also make a project more attractive to investors, as it reduces risk.

How to apply for grant funding

Every funding body will have a different application process and it’s important to get familiar with this before starting an application. Especially vital will be the timelines involved – it can take six months from application to receiving grant funding so it’s essential to factor this into any plans that you have for the funding.

Grant funding is a potentially transformative source of income for any business, either to support capital or research and development costs.

Grant Advance Funding through SPRK Capital

SPRK Capital are a leading provider of R&D tax credit loans and grant funding loans in the UK. We support innovative SMEs by giving them access to their capital when they need it.

To find out more about how we can advance your grant funding to you, visit our ‘Grant Loans‘ page.