A Small Business Guide to Administering Grants

Business grants can be a vital source of funding for small businesses. If you’re a start-up they can help you get your business off the ground, and grants can also support business growth for a more established business to reach new markets.

There are many small business grants available, you’ll find some sources below. We’re going to focus on what happens once you’ve been given the grant, the time involved in administering it, and in reporting back to the Grantor. We’ll explain from what, and where grants can be available through to sharing our top tips for successful grant administration.

small business grants administration

Where do small business grants come from?

Small businesses can access grants from a wide range of sources.

  • Governments (UK and overseas):
    • direct from Govt department
    • via an administrative agency e.g. Innovate UK
    • via industrial consortia
  • Foundations, Charities, Trusts e.g. Wellcome Trust
  • Local Governments
  • Quangos e.g. Chambers of Commerce, Business Initiatives
  • Other businesses e.g. financial institutions, bigger companies
  • Consortia of interested parties (usually means increased complexity!)
  • Residual EU grants.

Where you can source grants: Simply Business list of grants for small businesses and British Business Bank cover Government Start-Up Grants and Small Business Grants. Technology/science based businesses should get on the mailing list of the UK Research Councils and Innovate UK.

What are UK based R&D grants?

R&D grants are grant applications for anything ‘new’ which hasn’t been done before. It could be a product, process, or software for example.

  • You’re usually invited to respond to specific ‘calls’ and each call will have its own eligibility criteria, area of interest and rules.
  • Many are administered via Innovate UK using their IFS platform BUT rules within that can still vary.
  • You usually claim paid costs net of VAT in arrears, although some grants allow you to claim in advance.
  • Government grants are equally as varied, depending on the department awarding them and the ‘call’:
  • Some are called grants but are really contracts for services – in which case your claimed amounts will be gross of VAT.
  • Some only pay claims against completed Work Packages/Milestones, rather than against time periods – Excel is your friend in tracking work done and goods purchased against specific tasks.
  • Some grants have specific requirements around subcontractor costs so watch our for these when make your application; some require UK based subcontractors only and there are a few grants where subcontractor costs claimable are capped.
  • Charity grants usually have a tighter stakeholder group which can make things easier to administer.

Overseas Business Grants

  • EU grants are getting less common, and they can be full of red tape, rules and arranged marriages.
  • RoW: as above but with the additional challenges of:
    • Claiming and receiving funds in currency (don’t get stung on exchange rates)
    • Audit requirements that don’t have relevance or equivalents in the UK
    • Dealing with institutions that don’t play by the same rules – someone else’s red tape is always so much worse than your own.
  • Sometimes you may come across Grants that have US Federal or NIH rules lurking in the small print which may mean additional administration to comply with the rules and certainly extra costs to meet the audit and/or reporting requirements.

Is It Worth It?

We would always recommend you do a cost/benefit analysis, and consider if a small business grant could cost more than you can afford in your cashflow.

  • Some business grants are right fiddly and will take a real chunk of admin time, – VERY few grants cover admin costs (i.e. your time).
  • The time factor can be even worse if your company is leading a consortium – you’re responsible for coordinating all of the claim, ensuring all the participants submit paperwork and reports on time and that their claims are correct.
  • Many grants require matching funding and/or only pay a percentage of your actual costs (typically 70-85% so the company has to have available funds to cover the unrecoverable costs.
  • Remember you can usually only claim after you have spent the money so you have to have the first 2-3 months cashflow before you start.
  • Most grants will only make a nominal contribution to the ‘overhead’ costs of running a project – the golden goose is FEC. Innovate UK gives 20% of labour costs to cover everything.
  • The company will have to meet the costs of audits and any required independent reports.

Top Tips to Grant Administration

Sarah is our expert grant administrator in The Smart Virtual Finance Team. We’re delighted she is sharing her top tips for grant administration which she has gained over many years of experience helping businesses in Oxfordshire with their grant administration. You need to ensure that you are getting maximum value from your hard-won grant, so let us help you!

Here are her top 8 tips to consider:
1. Read and be familiar with the Grant Offer Letters and any associated documents; these contain the ‘overt’ rules.
2. Get on friendly terms with your Monitoring Officer, or equivalent; pick their brains, keep them informed and convince them of your general ”good eggness” because:

  • They are the initial gatekeepers of claim payment.
  • If you need a concession, or a favourable clarification of ‘covert’ rules, they will be the first point of contact and escalation.

3. Also cultivate a relationship with the relevant senior person in the granting body because if it’s a bigger ask, you’ll need their help.

4. You absolutely need to keep on top of tracking grant costs otherwise claims are a nightmare.

5.Claiming R&D tax credits requires even more detailed tracking, justification and evidence. So keep on top of this and make sure your accounting system can identify the different categories.  You will also need a fairly detailed description of the project focussing on why your work is new research, so leave time for your project leader(s) to generate these.  HMRC has tightened up enormously on the scrutiny of claims and as of 2024 now requires a lot more information.

6. Look ahead and monitor actual v budget v forecast  so you can take appropriate action in time.

7. Keep talking to your principal investigator (PI):

  • To head off problems, e.g. is a Project Cash Request (PCR) needed?
  • To be aware of changes to work/timing/costs

8. If you think you need a PCR, start the conversation with the Monitoring Officer/grantor asap and submit asap – they can take ages to get approved.

What Grantors Want

Grantors don’t always think closely about the detailed logistics of grant administration, but they do care a lot about accountability and evidence, so you will need total coverage of documentation for costs and changes.

Nevertheless, at the end of the day, they want you to succeed and to claim the money (otherwise it messes with their budgets and goals), so if you need to alter the conditions a little, ask!

Need Help to Manage your Business Grant?

You’ve made a successful grant application, but how do you administer it? We can help you with the claiming process, reporting back and putting together the final claim evidence pack.

Email Tracy Smart or book a call to discuss.

 

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Caroline

Caroline Cant

Payroll Manager & Finance Assistant

Caroline is a level 3 qualified ICB bookkeeper and payroll manager, she has 10 years’ experience working in industry and practise with clients from many different sectors. She has a passion for payroll and a motivation for management accounts, she believes that good business decisions can only be made with accurate numbers. Her top tip is to always budget and set aside for taxes.

Outside of work, Caroline is a busy Mum of 2 girls. In her spare time, she enjoys playing netball, doing her nails and turning her hand to some household DIY.

nicki

Nicki Kinton

Consultant Credit Management Lead

Nicki is a qualified Credit Manager, and with more than 30 years’ industry experience and more than six years as a business owner, she knows all there is to know about helping businesses manage their money and get paid on time.

Nicki believes that late payments are not the problem, they’re a symptom that a business is missing some key activity in the granting, monitoring and controlling of credit terms. Nicki focuses on reducing late payments, improving the bank balance and putting strong credit control systems in place.

In her spare time, Nicki’s an accomplished French horn player, an avid reader and also collects (and occasionally drinks) different types of gin.

Sarah

Sarah Hargreaves

GRANT ADMINISTRATOR

Sarah has been a generalist administrator for nearly 40 years thus garnering a wealth of experience in a variety of fields: HR, bookkeeping, facilities management, communications, events management, company secretarial and corporate governance.  Administrator of an interdisciplinary research centre at the University of Oxford for 14 years, since 2003 she has specialised in providing back office services to high-tech start-up companies on a flexible basis with a particular expertise in grant administration and finance, liaising with a range of funding bodies.   Sarah believes that small companies can really benefit from accessing experience as it is almost certain that the wheels have already been invented for many problems with which a company might struggle.  When working with micro companies, her aim is to release the innovators, experts and commercial leaders from administrative duties so that they are able to focus on driving their business forward.

Sarah’s secret work vice is proof-reading as she can’t see a misspelled word, misplaced punctuation or clumsy sentence without reaching for the mouse. Away from work, Sarah is happiest when in close proximity to a stage.

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Philip Briscoe

Consultant Commercial Director

Philip has over 25 years’ experience working for businesses of all shapes and sizes, from start-ups to scale-ups, to multinational corporations in a variety of senior roles including commercial director, chief operating officer and chief corporate development officer. Philip studied European Business Studies at Brunel University (BA Hons), has a CIM post-graduate diploma in marketing (DipM), and has studied Executive Finance at the Saїd Business School, University of Oxford.   

Philip now works with businesses in early-stage and scale-up phases where he applies his knowledge to support in areas such as unblocking growth inhibitors, commercial strategy development, and investor-readiness for businesses looking to raise equity-based capital. 

Philip is generally kept busy by his three children and overactive spaniel, Sid. In his spare time, he is an Assistant Section Leader with the Scouts, a fair-weather cyclist, and produces a men’s mental health podcast called Mid-life Men.  

Janet Harding

Consultant Finance Director

Janet is a qualified Chartered Accountant with over 30 years’ experience working at senior levels in both the commercial and not for profit sector.

She has extensive experience of budgeting, forecasting and providing insightful financial management reporting as well as implementing new processes and systems. As a Finance Business Partner, Janet has acted as a trusted adviser assisting in key decision making.

As Financial Controller for a large Charity, Janet was responsible for all statutory reporting, ensuring compliance with Funder and Charities Commission reporting in addition to managing all aspects within the Finance department.

Janet has always aspired to be the source of knowledge and wisdom on all financial matters and be able to share this with non-finance colleagues in order for them to perform their roles as effectively as possible.

Outside work, Janet plays an active part in the community as a Parish Councillor. She enjoys travelling, going to music festivals and concerts, reading and crafting.

kasia

Kasia Szerszenowicz

CHARTERED MANAGEMENT ACCOUNTANT &
HEAD OF VIRTUAL FINANCE TEAM

Kasia started her career in 2008 and qualified as a CIMA Chartered Accountant in 2015. She has covered a number of roles within finance, leading to a Financial Controller. Kasia has broad sector experience including recruitment, media and sport industries.

She has gained substantial finance experience covering a range of functions, all of which benefit the SMEs supported by the virtual finance team. These include financial and management accounts, forecasting, payroll, domestic and international VAT compliance, audit, invoice discounting, team leadership and coaching.

Kasia is driven to seek process improvements for our clients within core areas to lead to greater efficiency. She believes people are the key driver to any business’s success.

Kasia is a dedicated Mum to two daughters and has recently taken up tennis in her free time. She adores dogs and would happily re-home every stray if she could! She applies ‘Kaizen’ to her daily life, saying “I am a strong advocate of the Japanese philosophy and a believer that you can always make things better, even when things work at a given time.”

zuzana

Zuzana Wilson MBA

FINANCE OFFICER

Zuzana is an experienced finance officer who both enjoys and is successful when working in a team environment. Her work experience has been largely customer orientated, so she is able to manage competing demands and work to deadlines. 

Zuzana is always keen to learn and improve her skills. The Smart Team, therefore, is supporting her with an apprenticeship to study AAT Level 4 Professional Diploma in Accounting (building on her AAT Level 2 and 3). She will be developing her knowledge of company financial statements, business tax, audits, credit management and cash and treasury management. 

Zuzana enjoys keeping active by running half marathons and triathlons and loves to spend time with her family.

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Magdalena Adams

FINANCE ASSITANT

Magdalena is AAT Level 3 qualified. Holding a BSc degree in Sports Science from Oxford Brookes University, she has spent most of her working life in education and childcare. Having decided to change career in 2020, she now looks forward to embarking on a career in financial services and brings a keen eye for detail and wealth of enthusiasm to the team.

Zal Sethna

CONSULTANT CHARTERED ACCOUNTANT & TAX ADVISOR

Zal is a qualified Chartered Accountant & Chartered Tax Advisor, with over two decades of experience across a diverse client base, focusing on accounting (financial and management), auditing, payroll, and direct and indirect taxation. 

Zal leads our virtual finance team to prepare monthly and quarterly management accounts for clients and ensure their regulatory reporting requirements are all met in a timely manner. 

His life long work mantra has been “let people get on with what they know and what they do best”. Hence, entrepreneurs should focus on building their business with the comfort that they have a strong accounting team working in the background to help them achieve their goals. Outside of work he enjoys time with his family, cycling, reading and the theatre.

Tracy Smart

Founder and Managing Director

Tracy is a firm believer that people are the key drivers of success and this is the ethos that sits behind The Smart Team. Throughout her career as a Finance Leader she understood that success always came when there was a capable team with strong leadership in place. However, this is not always possible in the early stages of a business and she recognised that a flexible finance service could help ‘scale up businesses’ achieve their growth goals. 

Within The Smart Team she helps clients feel confident in their decision making by giving insight and clarity over their finances, and she supports them build flexible finance teams that give them just the right mix of experience and technical ability when they need it.