According to HMRC, a business has not yet become active or started trading if it has not yet engaged in any business activity. Even for early-stage entrepreneur enterprises which are still setting-up, or researching their product, grant funding can be invaluable.
Most grant funding providers look to support specific projects or initiatives, for fixed periods. So, a successful grant application is likely to be one which spells out precisely what you need the funding for; why there is demand for the product or service; and expected costs associated to the project as well the total amount of funding required.
To access pre-trading grants or entrepreneur grants, you must be able to demonstrate the clear intention that business activity will shortly follow.
The aims of government grants include:
- Financial and business support to assist young professionals to start a business.
- Payments for professional assistance with the development of a specific concept or a new product.
- Enabling access to business development support and guidance (workshops, networking, one-to-one support).
- Vouchers to access external expertise
These grants do not only come in the form of cash payments to fund certain aspects of development activities; they can be in the form of business development support, networking, or project management assistance to support and develop various areas.
One specific example of a pre-trading grant is the Enterprise Programme for Young People within the UK. Setup by The Prince’s Trust, the programme aims to help young people aged 18 to 30 to set up their own business in England, Scotland, Wales or Northern Ireland. The amount available is between £1,000 to £5,000.
The applicants must:
- Be aged between 18 to 30
- Have a business proposal
- Be unemployed or working less than 16 hours per week
- Employ a maximum of 9 employees
The applicants cannot:
- Be on a gap year
- Have graduated from an undergraduate degree less than six months ago
- Have a postgraduate degree or professional qualification.