Five misconceptions about grant funding to know before you apply

If you’re involved in the world of business in any capacity, you’ve no doubt heard about grant funding. You know, that way of getting yourself some free money. You just write a quick paragraph about how much you need and the money will land in your account that same day, right?

Well…Not quite.

A grant is a sum of money given to you by a governmental, commercial or charity organisation for a particular purpose or use.

Whilst many of us think they are magic pots of unlimited money, grants are actually much more complicated and applications for them are much harder to complete than a lot of people expect.

In this post, we’re going to combat these common misconceptions, to help you make a more informed decisions about whether going for grant funding it right for you and your business.

Misconception 1: It’s free money

A grant is not “free” money and is not really like a loan at all.

To be considered you need to have a clearly outlined project plan with defined aims. The money cannot be used to grow the business or for general business costs and — no — you can’t buy business premises or clear your business debts with either! Instead, a grant can only be used for a specific idea, project, product or service. That’s why part of the application process is outlining exactly how you will use the money. Each and every penny of it!

In reality, the money has to be used for a new product or service development. If this doesn’t sound like you, a grant may not be the way to go.

Misconception 2: A grant proposal is easy to write, anyone can do it

Writing any grant proposal is hard work, never mind writing a successful one! It takes a lot of time and effort. If you think you can write a successful proposal the night before a closing date, you would be wrong.

You need to allow yourself time to research the grant you’re applying for, read around the topic area and to plan, create and write the project down to a tee. The application requires detail; what is the project, who will be involved, how do you plan to execute it, why do you need the money, when will you start and finish, where do you plan on pitching or marketing the product?

Grants are also very competitive! When thinking of applying, it is useful to remember that you are competing against hundreds, maybe even thousands, of companies for the money. So, if you don’t carve out enough time to do a proper job, the chances are that the application will be rejected.

Misconception 3: Impact doesn’t matter, it’s all about who needs the money most

In order to be successful the idea you are proposing has to have a positive impact.

This impact can take on many forms including social, cultural, environmental, technological and, most obviously, financial! For example, the idea being proposed could increase jobs, it could better the environment or it could minimize crime.

Grants are not awarded based on greatest need, rather most grants go to applicants whose proposals meet the aims of the grant and seem most likely to deliver.

Misconception 4: There are no strings attached

The successful awarding of a grant does come with a promise to deliver. You outlined how you would use the money, and therefore you have to keep to this.

Some funders require you to make regular check-ins and updates to ensure the project is going to plan and that you are meeting the specific objectives you outlined; others make site visits to ensure the work is being done. At the very least you will have to provide evidence of the final product or service you intended to use the money for.

Do not expect that once you win the money, it is yours to do what you want with!

The funder has every right to withdraw the money if they feel you are not fulfilling your end of the deal, which may impact you applying and winning future grants from the same funder. You need to be sure to use the money as outlined and any deviations must be reported to the funder for approval.

Misconception 5: You get the grant funding immediately

Once you’ve submitted your grant funding application, you may have to wait a couple of months before you hear the outcome. If you are awarded the grant funding, you may need to wait around a month for the documentation, due diligence and contracts to be completed, signed and agreed before the work begins. Once the project begins, the funds may be paid in arrears, meaning that the grant funding money could take around 6 months to receive after you’ve found out that you have been awarded the grant funding. This means that you may need to factor in your cash flow and aims of the project around the timing of the product or service you’re developing.

Final thoughts

So, a grant isn’t an unlimited pot of free money, a loan that you can buy business premises with, something that you can easily apply for the night before or funding that you will receive immediately. Actually, a grant is a lot more complicated than it first seems and applying requires serious time, effort and planning for it to be successful. That’s if a grant is even right for you.

However, hopefully the above misconceptions have helped you to decide whether you should be applying for a grant. And, if you do go for it, we wish you nothing but the best of luck!

If you’d like to learn more about accessing grants or need help writing a grant, please get in touch: hello@snapout.co.uk or visit our website to find out more: www.snapout.co.uk.

This post was written by Amie Weedon, Snap Out’s grant application writer and user researcher.