Recent events have illustrated the fragility of businesses in highly competitive markets. Small businesses and start-ups were thrown into disarray as potential clients, suppliers, customers, and employees were all heavily impacted by the new normal of the COVID-19 pandemic. Businesses across the world, both new and established, turned to support mechanisms to stay afloat. Business grants and incentives, often provided by the government or local councils, served as the difference between some businesses surviving and being forced to shutter their doors. These grants, often characterised by non-existent interest rates and obligations to pay back, are highly sought after in the London business scene, particularly in times of uncertainty.
Commonly regarded as one of the world’s best places to establish a business, London is home to countless such grants, loans, and incentives, ranging from small monetary rewards to life changing assistance packages that allow businesses to quickly establish themselves and acquire the tools or equipment necessary for continued success.
However, these avenues of assistance can often be hard to navigate and are commonly divided depending on the industry and size of the business in question. So, to make things a bit easier for you, we have collated a list of what we believe to be some of the most generous (and widely available) grants and incentives throughout the Greater London area.
Small Business Rate Relief
The variety of boroughs across London offer rate reductions in the form of government-supported small business rate relief schemes for businesses operating out of a property with a rateable value of less than £15,000. The level of rate relief provided is calculated depending on the level to which your property’s value is below £15,000. For example, the London Borough of Hammersmith and Fulham provides a 100% rate relief to businesses with a rateable property value below £12,000, with the level of relief decreasing by 1% for every £30 over £12,000 (up to £15,000).
New Enterprise Allowance
This initiative is government-backed and aims to assist individuals currently on a form of income support, whether that be Universal Credit, Jobseeker payments or Employment Allowance, with the establishment and development of their own business. In order to receive this allowance, applicants are required to develop a mentor approved business plan, after which they can receive a weekly sum, worth up to £1,274 over 26 weeks, as well as access to loans to aid set-up costs.
Part of UK Research and Innovation, Innovate UK is a frequent provider of ‘Smart Grants’, the most recent of which (January 2021) involves the investment of £25 million towards game-changing and commercially viable ideas in the business technology and research spheres. You can find more information on the variety of Innovate UK grants here.
The Prince’s Trust
This initiative aims to support young people between the ages of 18 and 30 to get their businesses up and running. The Prince’s Trust provides several funding opportunities, such as low interest startup loans (from £500 to £5,000 capped at 6.2% APR) and small business grants in special circumstances. Additionally, The Prince’s Trust provides mentoring and development programmes, as well as a wide variety of resources designed to help first-time business owners with concepts such as budgeting, taxation, and insurance. Find out more about the Prince’s Trust and their enterprise programmes here.
Research and Development Tax Credits Scheme
This scheme lets businesses claim back a sizeable percentage of their research and development expenditure. SMEs and startups that are heavily involved in development will benefit greatly from this scheme. As of April 2015, SMEs are able to deduct 230% of qualifying research and development expenditure, with payable credit amounting to £33.35 for every £100 spent.
A selection of COVID-19 specific loans and incentives exist to help small businesses remain open during this time of uncertainty. Firstly, the Bounce Back Loan Scheme (BBLS) allows London based businesses established prior to the pandemic to borrow up to £50,000 interest free for the first 12 months (with a 2.5% per year rate afterwards). Businesses looking to borrow more than £50,000 are encouraged to explore the government supported Coronavirus Business Interruption Loan Scheme (CBILS), which provides loans up to £5 million. Other COVID-19 support opportunities include the Coronavirus Job Retention Scheme, the Kickstart Scheme, the Coronavirus Statutory Sick Pay Rebate Scheme, and a variety of additional measures depending on your business.
London is also home to a wide range of angel investors and venture capital firms looking to cultivate businesses across a variety of sectors through investment. Examples of such groups include the Startup Funding Club and massive venture capital funds like Earlybird, both of which provide capital and support to early-stage London startups.
In addition to the monetary grants and incentives made available throughout the city, businesses can benefit from numerous online learning platforms such as the Digital Business Academy (for those aspiring to enter the technology sector) and Skillshare.
You can also visit the UK Government website for a full list of finance and support sources for businesses in London. Additionally, the London Business Hub provides several avenues for support, planning, training, and growth.