Free money for your business? Here's what government grants are available in 2026.
Government business grants are non-repayable funds provided by central government, local authorities, devolved administrations and public agencies to support UK businesses. Unlike loans, grants do not need to be paid back, making them an extremely attractive form of funding. However, they are competitive, usually come with strict eligibility criteria and often require match funding—meaning you must contribute a proportion of the project costs yourself.
Grants are available for a wide range of purposes, including starting a business, research and development, innovation, exporting, hiring staff, training, energy efficiency and purchasing equipment. The UK grants landscape is complex, with hundreds of schemes available at any given time, each with different rules, deadlines and application processes.
The main categories of UK business grants include:
Grant amounts vary enormously, from a few hundred pounds for micro-grants to several million pounds for major innovation projects. Most small business grants fall in the £1,000 to £50,000 range.
Innovate UK, part of UK Research and Innovation (UKRI), is the UK’s national innovation agency. It runs regular grant competitions for businesses developing innovative products, services or processes. Grants typically cover 50% to 70% of eligible project costs, with the business funding the remainder.
Innovate UK competitions are open to businesses of all sizes, though many are targeted at SMEs. Applications are assessed competitively, and the process is rigorous. You will need to demonstrate the innovation potential, market opportunity, commercial viability and your team’s ability to deliver the project. Success rates vary by competition but are typically 10% to 25%.
💡 Innovate UK also runs the Smart Grants programme, which is open year-round and accepts applications from any sector. Smart Grants fund disruptive innovations with significant market potential. Individual projects can receive between £25,000 and £2 million.
Many grants are administered at the local level by councils, combined authorities and local enterprise partnerships. These are often funded by central government programmes such as the UK Shared Prosperity Fund (UKSPF) and the Levelling Up Fund. They tend to focus on specific geographic areas and economic priorities, such as job creation, town centre regeneration or sector development.
Local grants are often smaller in value (£500 to £25,000) but can be less competitive than national schemes. They may also come with business support, mentoring or networking opportunities. Check your local council’s website, local growth hub and chamber of commerce for current opportunities.
Every grant has its own eligibility criteria, but common requirements include: being a UK-registered business, operating in a specific sector or region, being of a certain size (usually SME), contributing match funding, and using the grant for a defined purpose. Some grants require you to create jobs, develop intellectual property or achieve specific milestones.
The application process typically involves completing an online form, providing a detailed project plan and budget, submitting financial information about your business, and demonstrating how the project aligns with the grant’s objectives. For larger grants, you may need to present to an assessment panel.
⚠️ Never pay an upfront fee to access a government grant. Legitimate grants are free to apply for. Be wary of companies that charge fees to find grants or guarantee funding—these are often scams. Use official sources such as gov.uk, Innovate UK and your local growth hub to find genuine grant opportunities.
If you do not secure a grant, R&D tax credits offer another way to fund innovation. UK companies that spend money on qualifying research and development activities can claim tax relief worth up to 27% of qualifying expenditure (under the merged R&D scheme from April 2024) or up to 27% as an above-the-line credit. Loss-making companies can claim a cash credit, making this valuable even for pre-profit businesses.
R&D tax credits can be claimed retrospectively for up to two previous accounting periods. Many businesses that qualify do not claim, so it is worth reviewing your activities with an accountant or R&D tax specialist.
While technically a loan rather than a grant, the government-backed Start Up Loans programme is worth mentioning. It provides personal loans of up to £25,000 per individual at a fixed interest rate of 6% per annum, with no arrangement fees and free business mentoring. Loans are available to businesses that have been trading for less than three years and to individuals planning to start a business.
The application process involves writing a business plan and cash-flow forecast. If your application is successful, you also receive 12 months of free mentoring from an experienced business professional.
Identifying the right grants and preparing strong applications takes time and expertise. A business finance broker can help you explore all available funding options—grants, loans, tax credits and other incentives—and match you with the most suitable opportunities. Find a business finance broker through Nesto to maximise your chances of securing business funding.
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