What is a Business Expansion Grant?
A Business Expansion Grant is designed to assist the business in its growth phase after the initial 18 month start-up period.
What does the Business Expansion Grant cover?
A Business Expansion Grant may be paid to buy new equipment, help with direct business costs such as salary, rental costs, utilities, marketing and consultancy costs. Grant assistance is not payable to buy a building, land or mobile assets.
Grant expenditure may be considered under the following headings:
- Capital Items – including fit out of workspace, office equipment, machinery, fixed technology costs, and so on. (Note that the cost of buying or construction of a building and the cost of land and mobile assets including laptops, tablets and smart phones are excluded from grant aid.)
- Salary Costs – for the first year of employment. This money is paid in two instalments. The first instalment is at the start of employment; and the second after six months of employment. The level of grant support will reflect the salary scale proposed for the job being generated. Jobs attracting salaries of more than €40,000 will be eligible for the maximum €15,000 grant support. Lower-paid positions will receive a lower grant. Please note that approved grants are to be used for their intended purposes. If salaries are being supported by the LEO, the detailed job description and contracts for the role need to be forwarded to the LEO before the funds can be drawn down.
- Consultancy, Innovation, Marketing Costs – these may include packaging, brochures, business cards, trade fairs, website development, consultancy fees and other marketing initiatives.
- General Overhead Costs – these include, for example:
- Utility Costs – these include installation costs for fixed line telephone, broadband and three-phase power (electrical supply with a voltage suitable for businesses).
- Rental or Accommodation Costs – for the first year of the enterprise. (Note that if rental space is already subsidised by an investment of public funds, grant support will only make up the difference between the subsidy and the market rate.) Rental costs may be paid up front subject to supplying the LEO with a signed lease or rental agreement. There is an element of refundable aid in Business Expansion Grants (grant money that you have to pay back). The LEO’s Evaluation and Approvals Committee will determine this amount.
Priming Grant and Business Expansion Grants
If a business received a Priming Grant (start-up grant), it cannot apply for a Business Expansion Grant until 12 months after the date of approval of the Priming Grant. An exception to this might be made in cases of exceptional merit where less than the maximum Priming Grant was drawn down and provided the rules of ‘De Minimis aid’ are respected. De Minimis aid is small amounts of State aid granted to enterprises.
Who can apply for a Business Expansion Grant?
Micro enterprises (Limited Companies, Designated Activity Companies, sole traders, co-operatives and partnerships) can apply for a Business Expansion Grant to help them to expand the business after the first 18 months of trading. The maximum Business Expansion Grant that can be paid is 50% of the investment or 50% of €50,000 (€25,000) whichever is less.
Business Expansion Grants are subject to being 30% refundable to the Local Enterprise Office.
When can I access the grant funds?
If your application is approved, you can draw down your funding after you submit evidence of the expenditure detailed in your letter of offer. Also, any funding approved must be claimed within the time period on the letter of offer.
To claim any financial assistance approved, you must submit the following:
- a signed acceptance of offer
- original invoices
- evidence of payment
- an auditor’s Certificate (if required)
- a claim form
- a current valid tax clearance certificate
- any other documents as set out in the letter of offer
Please note that you cannot use your grant to pay for any expenditure incurred before you make the application.
What is ‘De Minimis’ aid?
Business Expansion grants are provided under the European Commission Regulation on ‘De Minimis’ aid. De Minimis aid is limited amounts of State aid – up to €200,000 in any three-year period to any one enterprise. De Minimis aid is regarded as too small to significantly affect trade or competition in the common market. The amounts of grants are regarded as falling outside the category of State aid which is banned by the EC Treaty and, therefore, they can be awarded without reference to the European Commission.
However, a Member State must track De Minimis aid and make sure that combined aid payments from all sources to one enterprise in any three-year period respect the €200,000 ceiling.
Therefore, you need to provide details of all other grant aid that has been awarded to you or your company within the past three years. Please note that a false declaration to show a figure under the threshold of €200,000 could later mean that you would have to pay back the grant aid with interest.
In order to apply for a Business Expansion Grant, it is necessary to contact your local LEO to assess suitability and eligibility.
Applications are considered on a case by case basis and the level of funding will be determined following an assessment of:
- The merits of providing grant support to the activity set out in the application
- The need for financial support
- Previous funding provided to the promoter
- Subject to availability of funding
- Potential for employment and sales growth
If an individual or business wishes to make an application they will be requested to submit a completed online Business Expansion Grant Application. Additional information may be requested following this. When the LEO receives all the necessary information your application will be evaluated at the next available meeting of the LEO’s Evaluation & Approvals Committee. You will then be informed of the decision. Please note that there is a short 1 question (2 minute) video interview as part of the online application
Expenditure incurred prior to an official written acknowledgement of your completed application will be considered ineligible for grant aid purposes. The official acknowledgement is not an indication that the application is eligible or will be awarded grant aid. The final decision on grant assistance is with the Evaluation & Approvals Committee of the Local Enterprise Office.
After you submit your application
Your LEO will acknowledge your application, and an executive from the LEO will meet with you to discuss the application. You may be asked to provide additional information.
When the LEO receives all the information they need, your application will be evaluated at the next available meeting of the LEO’s Evaluation and Approvals Committee. You will then be informed in writing of the decision. Please note that you cannot use your grant to pay for any expenditure incurred before you make the application.
Also note that your submission of an application or the official acknowledgement of your application is not an indication that the application is eligible or will be awarded grant aid. The final decision on grant assistance is with the Evaluation and Approvals Committee of the Local Enterprise Office.
For more information on financial supports available from the LEO including information on eligibility, please see www.localenterprise.ie