Wales authorities and lenders provide a wide variety of financial support for businesses, whether you’re starting a new venture, looking to expand, or trying to recover after challenging times. These options include small business loans, which must be repaid with interest, and government grants for businesses, which are non-repayable but often come with strict criteria.
In this article, we’ll look at some of the options available, as well as alternatives for small business owners in Wales.
Types of Business Loans in Wales
iwoca small business loans
iwoca provides a range of business loans tailored to the needs of SMEs across Wales. Our Flexi-Loan is designed to offer rapid access to funds without lengthy application processes or the need for collateral. Key features include:
- Loan amounts: Businesses can borrow between £1,000 and £1,000,000, making these loans suitable for everything from short-term cash flow needs to larger investments in growth.
- Flexible repayment terms: Repayment periods range from 1 day to 60 months, with no fees for early repayment.
- Fast funding: With decisions often made within hours, funds can be deposited into your account as quickly as the same day, providing the speed you need to keep up with your business.
- Transparent pricing: iwoca offers clear, upfront pricing with no hidden fees, so businesses know their costs from the outset.
- Interest on outstanding balance: Interest is only charged on the outstanding loan balance, not the entire loan amount, which helps to reduce overall borrowing costs.
Development Bank of Wales
The Development Bank of Wales is a local funding institution dedicated to empowering Welsh businesses and communities, offering tailored financial solutions for businesses at every stage of growth, including:
- Micro Loans: £1,000 to £50,000 to support start-up and early growth phases.
- Business Loans: Flexible loans ranging from £1,000 to £10 million to suit diverse business needs.
- Equity Investments: Funding between £50,000 and £10 million for start-ups and established technology-focused businesses.
- Seed Finance: Pre-revenue tech start-ups can secure funding to fuel innovation.
- Property Development Loans: For residential and commercial projects within Wales.
- Co-Investments: Works alongside banks, business angels, crowd funders, and other investors to provide comprehensive financial support.
What are the criteria for support?
To be eligible for funding, your business must:
- Be based in Wales or willing to relocate.
- Operate in either the B2B or B2C space, with a preference for micro to medium businesses. Non-SMEs are also eligible to apply.
Start-Up Loans in Wales
For aspiring entrepreneurs in Wales, the Start-Up Loans scheme provides an opportunity to access the funding and support you need to launch your business. Backed by the UK government, this programme is designed to turn your viable business idea into reality.
The Start-Up Loans Company offers government-backed loans to individuals aged 18 and over who have a promising business idea but lack access to traditional finance.
- Loan amounts: Borrow between £500 and £25,000.
- Interest rate: Fixed at 6.2% APR.
- Repayment terms: Flexible terms of 1 to 5 years.
- Additional perks: All loan recipients gain access to a business mentor, free training events, and exclusive offers to help support their entrepreneurial journey.
- No hidden fees: Applications are completely free, and no deposits are required.
Who can apply?
The application process is straightforward and open to anyone who:
- Has a viable business idea or has recently started trading (within two years).
- Has the right to live and work in the UK.
- Can provide proof of identity.
- Is not an undischarged bankrupt or under an Individual Voluntary Arrangement (IVA).
You’ll also receive personalised support from a Start-Up business adviser, who will guide you through the process of creating a business plan and cashflow forecast to strengthen your application.
Specialised loan programmes
- Tourism Investment Fund: Provides loans for high-impact tourism projects in Wales. Loans range from £100,000 to £5,000,000, often blended with grants.
- Property Development Loans: For residential and commercial projects, these loans range from £150,000 to £6,000,000.
Grants for Businesses in Wales
Unlike small business loans, business grants in Wales have the advantage of not having to pay them back. Given this benefit, grants are usually set up with strict aims in mind, often at a local or industry-focused level. They also tend to be highly competitive, as you might expect, with strict criteria for applications and approval.
However, while they can be a bit more work to find and apply for, they can also be a huge boost for startups, SMEs, and launching innovative projects.
Criteria for grants in Wales
When applying for Welsh government business grants, understanding the eligibility criteria is key. These grants are often targeted at specific types of businesses and projects to meet economic or community goals. While criteria vary between grants, here are the most common factors considered:
- Business size: Many grants are aimed at small or medium-sized enterprises (SMEs). This focus ensures funding is used to drive growth, innovation, or sustainability in businesses that may otherwise struggle to access finance.
- Industry and business type: Grants often target specific industries or sectors. For example:some text
- Environmentally focused businesses may be prioritised for green initiatives.
- Local job creation projects might receive funding to boost employment opportunities.
- Business location: Where your business is registered plays a big role in eligibility. Grants are frequently distributed by local authorities to stimulate economic growth in specific regions. Always check whether the grant is tied to a particular city, county, or area.
- Business age: Grants are often tailored to businesses at particular stages of development. For example, start-up grants are designed to support new ventures during their formative stages. Established businesses may have more luck with grants targeted towards expansion, innovation, or infrastructure improvement.
Start-Up Grants in Wales
If you’re planning to start a new business in Wales, there’s a wide range of start-up grants available to help turn your ideas into reality. These grants are designed to support early-stage businesses by covering key costs such as equipment, marketing, and training. Below are some of the top grants tailored for new entrepreneurs:
- Amount: Up to £2,000
- Who It’s For: Economically inactive and unemployed individuals aged 25 and over, particularly those facing barriers to entering the business world.
- What It Covers: One-to-one guidance, confidence-building webinars, and funding to help start a self-employed business.
- Amount: Up to £1,000 to cover 80% of costs
- What It Covers: Expert advice, equipment purchases, marketing materials, and business location costs to help new businesses grow.
- Amount: Up to £1,000 (50% of costs)
- Who It’s For: Start-ups that are six months to three years old.
- What It Covers: Expenses such as marketing, website development, IT equipment, and training to help businesses expand further.
- Amount: Up to £500 (50% of costs)
- What It Covers: A range of start-up costs, including IT equipment, web development, building works, and marketing for individuals launching their first full-time business.
- Amount: £1,000 to £50,000 (50% of project costs or £5,000 per job created)
- What It Covers: Focuses on job creation, with grants awarded based on the number of jobs created—including the business owner.
- Amount: Up to £1,000 (50% of costs)
- What It Covers: Comprehensive support for entrepreneurs, including workshops, courses, and funding for business development.
- Amount: Up to £10,000 (95% of the first £1,000 of costs, and 50% thereafter)
- What It Covers: Assistance with equipment, training, and marketing for new businesses getting off the ground in Swansea.
- Amount: Up to £2,000
- Who It’s For: Entrepreneurs under 25 looking to start a business in Wales.
- What It Covers: Start-up costs for viable business ideas that have the potential to become a primary source of income.
Shared Prosperity Fund Local Authority Small Business Funding
The Shared Prosperity Fund is designed to empower local businesses across Wales by offering targeted grants to foster economic growth, sustainability, and innovation. Managed by Local Authorities, this funding provides support for a wide range of projects. Below are some key schemes currently available:
Wrexham: Wrexham Business Grant Key Fund
This fund supports financially viable enterprises in Wrexham to start, grow, or improve performance.
- Funding Details: Covers up to 50% of eligible project costs, with grants ranging from £3,000 to £50,000.
- Eligibility: Open to pre-start and existing businesses generating revenue within Wrexham.
- Key Tip: Apply quickly—funds are allocated on a first-come, first-served basis.
Flintshire & Denbighshire: Cadwyn Clwyd Cyfryngedig
Cadwyn Clwyd Cyfryngedig offers bespoke funding options for businesses in North East Wales.
- Opportunities: Includes the Denbighshire Business Collaboration Fund, Flintshire Tourism Growth Fund, and others.
- Support Available: Tailored guidance to help businesses select the most suitable funding.
Flintshire: Carbon Reduction Grant
Helping businesses reduce their environmental footprint:
- Funding Details: Grants range from £1,000 to £5,000, with a 20% match funding requirement.
- Eligibility: Businesses trading for at least 2 years in Flintshire.
- Steps to Apply: Submit an Expression of Interest (EOI) form for initial assessment.
Conwy: Local Business Key Fund Conwy
Support for local businesses aiming to grow sustainably.
- Funding Details: Grants covering up to 70% of project costs, ranging from £3,000 to £100,000.
- Objective: Promotes pride in place and supports local business innovation.
- Eligibility: Open to commercial and social enterprises in Conwy.
Gwynedd
Town Centre Property Improvement Grant
- Funding Details: Grants between £2,500 and £250,000.
- Impact: Designed to improve the appearance and functionality of commercial spaces.
Business Development Fund
- Funding Details: £2,500 to £250,000 available to reduce costs or increase income.
Gwynedd Enterprise Hub Support Package
Comprehensive support for new entrepreneurs in Gwynedd and Anglesey.
- What’s Included: Up to £2,500 financial assistance, 1-to-1 advice, workshops, and networking opportunities.
- Eligibility: For residents aged 16+ in Gwynedd or Anglesey.
Workforce Skills Improvement Grant
- Funding Details: Up to £3,000 per business.
- Uses: Covers training costs, employee travel, and backfill staff expenses.
- Deadline: Apply before September 2024.
Anglesey: Mon CF Grant Options
Start-Up Grant
Designed for budding entrepreneurs.
- Funding Details: Supports eligible purchases like tools, furniture, and IT.
Grants for Young Entrepreneurs in Wales
If you’re a young entrepreneur in Wales looking to kick-start or grow your business, there are several grant opportunities tailored for you.
The SWEF Enterprise and Business Grant
The SWEF (Social Welfare Enterprise Fund) is specifically aimed at entrepreneurs aged 18-30. It prioritises individuals who’ve faced disadvantages or barriers in securing funding elsewhere.
- Eligibility:some text
- Must be based in Wales.
- Open to businesses operating for less than two years or in the pilot stage with clear market research.
- Sole traders or majority shareholders are eligible, and the business must be the applicant’s sole focus.
- Funding Details:some text
- Grants up to £500 for pre-revenue start-ups.
- Up to £2,000 for operational businesses with generated income.
- Examples of Fundable Activities:some text
- Equipment to increase efficiency or diversify revenue.
- Product development, prototypes, or materials for new product lines.
- Website creation and booking systems.
The Young Person’s Start-Up Grant
Managed by Business Wales, this grant supports entrepreneurs under 25 looking to start a new business.
- Funding Amount: Up to £2,000.
- Eligible Costs: Marketing, training, or essential equipment to get your business off the ground.
This grant also connects applicants with business advisors for tailored support through Big Ideas Wales.
Prince’s Trust Enterprise Programme
Young entrepreneurs aged 18-30 can apply for funding and guidance from the Prince’s Trust.
- What’s Offered:some text
- Financial support for training and starting costs.
- Access to mentors who provide personalised advice.
- Eligibility: Available for individuals unemployed or working less than 16 hours a week.
How to Apply for a Business Grant in Wales
Applying for a business grant can be a more involved process than applying for a small business loan, but it’s an opportunity that can reward the right efforts. Here’s how to make your application stand out:
- Read the eligibility criteria thoroughly: Before you start, take time to carefully review the grant’s eligibility requirements. Does your business tick every box? Make sure your application directly addresses these criteria – these are bureaucratic applications by nature.
- Show how you’ll use the grant: A grant isn’t just free money—it’s an investment in your business. Clearly outline how the funds will be used and, more importantly, the impact they’ll have. Whether it’s scaling operations, investing in innovation, or creating new jobs, explain why this funding is critical for your growth.
- Prepare for match funding: Many grants require you to contribute an amount equal to the funding you’re applying for. Demonstrate how you’ll raise or allocate this match funding, and make it clear that your business is financially prepared to meet the requirements.
- Update your business plan: Your business plan is the backbone of your application. Incorporate the grant into your overall strategy—showing how it complements your goals for growth. Lenders and grant providers want to see a cohesive, well-thought-out roadmap for success.
- Don’t wait until the deadline: Grant applications often operate on a first-come, first-served basis, and late submissions can risk missing out entirely. Start early to ensure you’ve covered every detail and have time to review before hitting “submit.”
FAQs
Can I combine loans and grants?
Yes, many businesses combine grants and loans to cover both match funding and project-specific needs. For example, the Development Bank of Wales offers flexible loans that work alongside grants.
How do I start the application process?
A great place to start is the Business Wales Finance Locator, then prepare a strong application highlighting your business's impact and growth potential.
Can I get an interest-free business loans wales
Yes, these can be available from specific councils or organisations who provide interest-free loans support businesses that align with economic growth goals.
