1. New Enterprise Allowance (NEA)
The NEA is a UK government program designed specifically for unemployed individuals receiving certain benefits. It offers:
- A weekly allowance for up to 26 weeks
- Access to business mentoring
- Potential eligibility for a low-interest Start Up Loan
It’s a practical first step for unemployed people with a viable business idea.
2. Start Up Loans Scheme
Although technically a loan, it’s ideal for unemployed individuals starting their first business. The government-backed Start Up Loans programme provides:
- Up to £25,000 in funding per founder
- Fixed interest rates
- Free mentoring and business support for 12 months
3. The Prince’s Trust Enterprise Programme
Aimed at young people aged 18–30, this programme helps unemployed youth turn their business ideas into reality. It offers:
- Grants or low-interest loans
- Business skills training
- Ongoing mentorship
It’s particularly beneficial for those facing barriers to employment.
4. Local Council Business Grants
Many UK local councils offer small grants to residents starting businesses, especially in areas with high unemployment. These can fund:
- Equipment
- Marketing
- Premises rental
Eligibility depends on your location and business plan.
5. Jobcentre Plus Flexible Support Fund
This fund provides financial support for unemployed people preparing to enter work or self-employment. It can cover:
- Training courses
- Travel costs
- Equipment or tools
You must speak to your work coach to apply.
6. Community Development Finance Institutions (CDFIs)
CDFIs offer funding and support to entrepreneurs from underserved backgrounds, including the unemployed. These often come with:
- Low-interest loans
- Business guidance
- Local community support
7. Turn2us Grant Search
Turn2us is a national charity that helps people in financial need find grants. Their database includes funding opportunities for unemployed individuals planning to start a business.
8. Business Gateway (Scotland)
In Scotland, Business Gateway offers grants, free advice, and training to unemployed individuals launching new ventures. Support is region-specific and tailored to local economic goals.
9. Shell LiveWIRE Programme
Though not exclusively for unemployed people, Shell LiveWIRE offers funding and mentoring to new entrepreneurs aged 18–30. If you’re unemployed and have a sustainable business idea, this is a valuable platform.
10. Enterprise Support from Charities and NGOs
Some UK-based charities offer enterprise grants for unemployed individuals from disadvantaged backgrounds, such as:
- UnLtd (for social entrepreneurs)
- School for Social Entrepreneurs (SSE)
These organisations often combine funding with mentorship and skills development.
Frequently Asked Questions
Can unemployed people get business startup grants in the UK?
Yes, several public and charitable schemes provide grants and loans to help unemployed individuals start businesses.
Do I have to pay back startup grants?
No. Grants are non-repayable, though you must meet the conditions outlined by the funding body.
What if I don’t qualify for a grant?
You may still be eligible for low-interest Start Up Loans, business training programmes, or support through your local Jobcentre or LEP.
Can I still get unemployment benefits while starting a business?
Yes, but you must inform the DWP and may be moved to a support programme like NEA.
Do I need a business plan to apply for a grant?
Yes. A clear, realistic business plan is usually required for grant or loan approval.
What businesses qualify for these grants?
Most sectors are eligible, though some grants focus on specific industries like tech, sustainability, or social enterprise.
Conclusion
Business startup grants for unemployed individuals provide a crucial opportunity to break the cycle of joblessness and build financial independence. Whether you’re young, recently laid off, or long-term unemployed, there are grants, loans, and support programmes designed to help you succeed. Take the first step—research, plan, and apply today.