Grant for Business Investment

Financial assistance towards large capital investment projects was offered in England in certain qualifying areas by Grant for Business Investment (GBI) but since Feb 2011, only for exceptional projects where the grant aid required is £2M or more.

A new discretionary £1.4Bn Fund has been set up for grant aid of £1M or more. This is called the Regional Growth Fund (RGF) and is available over the period 2011- 14. Criteria as far as manufacturing industry is concerned is broadly similar to that of GBI.

GBI (formerly known as SFI, is a discretionary grant designed for businesses that are looking to invest in an Assisted Area (Tier 1, Tier 2 and Tier 3) but need financial help to go ahead. Most manufacturing businesses are eligible to apply, as are business in service industries that supply a national rather than local market. Applicants can be any size of company, a partnership or sole trader. Assistance is provided to:

— Launch a new business
— Expand/modernise/reorganise an existing business
— Upgrade a business, introducing technological or other innovatory improvements
— Set up research and development facilities
— Or enable businesses to take the next step from development to production

All projects must meet the GBI scheme criteria and in each case the amount and terms of assistance will be negotiated as the minimum necessary for the proposed project to go ahead. There is also a minimum threshold for applications of a £10,000 grant.

Levels of support can be significant and depend on the quality of the project and its impact on productivity and skills. Successful businesses typically receive around 10% - 20% of a project’s total eligible capital expenditure, but support can vary widely either side of these figures. Higher aid ceilings might possibly be available for small to medium sized businesses (under 250 employees worldwide).

Grants are normally payable in instalments on reaching fixed capital expenditure and job targets, which are set out in a formal offer of support. These targets are agreed during appraisal of the application and are usually arranged to coincide with the project’s anticipated progress.

Previous Grant Schemes: Automatic grants such as RDG which ceased in 1988 no longer exist; GBI replaces SFI which itself replaced Regional Selective Assistance (RSA) on 1st January 2000, RSA continues to be the name of the scheme in Wales (as a component of SIF) and in Scotland.

ALL grants are discretionary and require an applicant to prove a genuine need, and that a project for which funding is sought will create and/or safeguard jobs. A grant cannot be claimed as a right - it has to be the result of an application for aid.

The discretionary nature of the grant regimes and strict criteria by which eligibility is determined suggests that you should speak first with GRA or other professionals rather than to the grant authority or other government body to avoid giving information prematurely which could then prejudice your potential case when final application submissions are reviewed during the formal appraisal process. Taxpayers' money is not given away lightly.

In summary the available Capital Expenditure grants for the English Regions are:

GBI - ALL Companies

Available for capital expenditure projects undertaken by ALL sized companies taking place within the UK in Tier 1 and Tier 2 Areas, and which will create and/or safeguard jobs.

Grants of 10% - 20% of a project’s total eligible capital expenditure, from £10K upwards, and running into £Millions are possible since there is no maximum stipulated by the scheme.

GBI - 

Available for capital expenditure projects undertaken by small and medium sized companies within the English Regions, in Tier 3 areas.

Small companies that employ less than 50 people can apply for up to 15% of the project costs as an SFI grant.

and also see detail of Regional Growth Fund (RGF).

See Wales and Scotland for details on RSA and Small Company Project schemes for those areas.