Retail School: Funding 101

Many people look at such promises with scepticism, not to say cynicism. Which is why it’s always somebody else who gets that money. But government bodies at all levels do have grants available as long as you, the potential grantee, fit the requirements.

That is one of the key barriers that stops people applying for a grant. Just what are the requirements and how do I find out about them? Also, those requirements can seem odd, but that’s the deal if you want free money.

The reality is that you have to do a chunk of research. That research will take you into the nuts and bolts of government, since that’s where grant moneys come from.

Recognise that banks, as commercial operations with a profit to make, publicise themselves as a source of business finance, whereas grant providers have no such need. You have to find them.

At the same time, those grant providers are required to give out the money they have available. Failure to do so is not success. Again, this is quite different from banking practise.

Next recognise that this is not uniform on a national basis. What is available to John Smith & Sons in Lancashire may well be quite different to what Fred Smith & Sons, just over the border in Yorkshire, can apply for. The local variations in grant provision are one of the frustrations that put people off this source of finance.

What can the grant funding support?

The grant funding is primarily focused on the capital costs of setting up a business. To ensure that the application can be audited, the RPA have limited support in areas where the items could easily be removed or are viewed as standard.

Ineligible items would therefore include standard computers and laptops, fixtures and some fittings. Also, only costs incurred after the grant is approved and contracted would be eligible and if you start a project before approval it will be viewed that the project does not need grant funding.

Is it worth the effort?

If you choose to apply for funding you will primarily have to deal with a delay in the project commencing.

Under LEADER support projects you should expect a four month approval process, and under the Growth fund it could be longer still. When applying for the funding you will need to complete applications forms, create a business plan and get at least three quotes for all costs.

If you are successful you will have to continue the business for at least five years after the last grant payment, and you will be subject to inspections and audits by the RPA.

But if you are successful, a 40% contribution to a business’s start up could make a very big difference to the business’s overall success, especially at the outset.

So where do you start?

I recommend a phone call to your county council to start with. I spoke to my own (Kent) and got a lot of very useful input, such as grant funding can start at the community level but can go national, indeed international. This can result in information overload but, to repeat my original point, who expects free money to be easy money?

Since this process is an investment in the future of your business, you may well be thinking ‘I need an expert   – just as you would do if investing the profits in a pension fund or, indeed, selling the business.

If you read last month’s column on this subject you might well have noticed that funding under the LEADER scheme (the one for smaller projects) allows you to include costs of a facilitator in your plans. Therefore, in such cases, a LEADER facilitator looks like what you want. You may not like the civil servant-speak but you have to live with it.

I spoke at some length to Michael Mack of Savills, a big name in rural development. He has been involved as a consultant helping people to access grant moneys for some ten years. Location of such a consultant is less important than level of expertise and track record, but you may still prefer someone in your area.

As well as the usual internet searches (remember that term LEADER facilitator), talk to your accountant, especially if he focuses on a rural area. You could also go back to your county council and find out from the relevant department if any local consultant(s) regularly sits across the desk from them with a client.