Grants, loans and freebies: financial help for startups

Posted on Oct 7th, 2014 | Get paid

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Shortly after the coalition came to power in 2010 they ramped up the pro-business rhetoric to almost deafening levels – the UK would experience an “entrepreneurial decade“, and we would be hauled out of the recession by an army of small business owners. We’re not quite ready for champagne corks yet, but the UK small business, freelancer and contractor communities are certainly expanding fast. Last year was the first on record when over half a million companies were incorporated, and research from IPSE showed the freelance sector had grown at a blistering pace.

A handy side-effect of the entrepreneurial zeal sweeping the country is that there are now many schemes in place specifically to help small businesses, and those starting a business now have more options than ever before when it comes to finances. Here we round up just a handful of the available aid.

Startup Loans

Nobody can seem to quite agree how to spell it (the official website says Start Up Loans, says Start-up Loans), but the Government’s flagship SME financing scheme has been a hit, with £62 million lent to over 12,000 businesses at the time of writing.

In order to qualify, applicants must be 18 or over, and will work on their business plan with a mentor before pitching to a panel for their loan. The average loan is around £5,000, and must be paid back within five years.

New Enterprise Allowance

Another Government-funded scheme, the NEA is designed to help the long-term unemployed back to work by helping them set up on their own. Applicants must be 18 or older, and receive one of the following benefits:

  • Jobseeker’s Allowance
  • Income Support as a lone parent
  • Employment and Support Allowance

A similar scheme to Startup Loans (you’ll get a mentor and some initial capital), the NEA also includes a weekly allowance of up to £1,274 paid over 26 weeks (don’t get too over-excited – £1,274 is the total amount, not the weekly amount) which you don’t need to repay.

The New Enterprise Allowance is run through Jobcentre Plus – you can find out more here.


The new kid on the block, Crowdfunding is definitely the method of business financing du jour. Rather than take a hefty loan from the Government or a financial institution, Crowdfunding allows ordinary members of the public to back your idea by pre-ordering a product, by purchasing equity in your company, or contributing towards a low-cost loan.

If you’re looking to go the pre-order route, Kickstarter is the place to look. If you want to sell a stake in your company check out Crowdcube or Seedrs. If you want a crowd-powered loan, RateSetter is a good bet.

Regional funds

Most local authorities or sector-specific bodies now offer some kind of business development grants or support scheme. Everything from £5,000 for farmers and foresters to a freebie £250 for new businesses in the Merseyside area is up for grabs – check out the Finance Finder for schemes relevant to you.


Lucky residents of 22 cities across the UK, including London, Manchester and Brighton can benefit from the Broadband Connection Voucher Scheme, launched in December 2013, which will contribute up to £3,000 of the cost of connecting your business broadband.

The Government hopes to expand the scheme to more cities soon, so register your interest on the website if you need a bit of cash to get online.

Update: As of October 2015 the Broadband Vouchers scheme has run out of funding, however we hope it will return again soon!

Growth Vouchers

The Government’s Growth Voucher scheme is designed for businesses which need to skill up. The scheme offers up to £2,000 towards business training in areas like cashflow management, leadership and taking on employees. There are certain criteria to fulfil (you must be a UK-registered business and be more than a year old, for example), but if you’re eligible you can apply from this website.

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Written by Jon Norris

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