Small Business Grant Scheme
Do you have a Small Business that provides export growth and/or import substitution for the domestic economy ultimately leading to job creation on the island?
The Small Business Grant Scheme is to help accelerate the growth of small businesses (1 to 10 employees). The main objective of the Scheme is to encourage job creation on the Isle of Man through increased exports and/or reduced imports, which will raise additional Government income to fund public services.
The Scheme offers enhanced grant support towards up to 40% of eligible expenditure up to a maximum of £25,000 to start-ups, and existing small businesses. In particular, funds may be used to support businesses seeking a grant contribution towards certain approved research and development (R & D) expenditure.
Start-Up Businesses may also be eligible for training and mentoring via the services provided under the Micro Business Grant Scheme. (link)
Are you eligible?
- Be resident on the Isle of Man for income tax purposes (under the provisions of the Income Tax Act 1970)
- Be an 'Isle of Man Worker' (under the control of Employment Act 2014) or hold a valid work permit in respect of your intended business activity
- Your business has 10 or less employees including the owners
- Be at least 16 years of age; applicants under the age of 18 will require parental/guardian consent at the time of contract signing to guarantee any possible repayments
- Be in control of the business; that is, owning 50% or more
- Be able to commit full time to the business, working 30 hours or more each week
- Ensure that they comply with any legal requirements in operating the business
- Hold the relevant skills, experience or qualification to carry out the proposed business.
The application will normally be rejected if the applicant:
- Operates a business which is the same as or substantially similar to a business they have operated within a five year period from the date of the application; (An exception may be made to this on a case by case basis for businesses in the emerging technology sectors)
- Has a turnover exceeding 150,000 at the time of application
- Operates a labour only service predominantly or exclusively to a single contractor
- Operates a business which is contrary to the laws of the Isle of Man or which may bring either the Department or the scheme into disrepute
- Has Income Tax or National Insurance arrears
- Has a criminal conviction which may in the view of the department and its advisors prevent the applicant undertaking this particular role.
Grant support may be offered against:
- Planned capital expenditure (alterations and improvements to buildings, new plant and machinery, new hardware and software)
- Non-recurring 1st year third party costs associated with the establishment of a project, e.g. first year expenses, professional fees, registration of intellectual property/trademarks/patents, implementing innovative clean technology processes. This specifically excludes Government fees and license costs
- Training costs
- The cost of renting premises
- The cost of specific new (off-Island) marketing ventures
- The costs of implementing quality standards, energy conservation, web-sites etc.
- Research and Development (defined in more detail overleaf in 2.4).
Grant Support for Research and Development
Applicants are required to demonstrate that the proposed research and development expenditure should lead to the business developing innovative products or services with future commercial potential. In turn this will lead to high-value export growth and job creation.
Qualifying Research and Development expenditure may include:
- testing and developing an innovative idea
- developing a new product or service
- an early stage feasibility study
- prototyping, field trials, market tests, proof of concept, validation
- late stage product or service development and testing
Allowable costs include:
- Materials consumed
- Capital equipment
- Sub-contracts, consultancy fees (third party)
- Reasonable overheads
- Travel and subsistence (Government approved rates)
- Other costs e.g. technical reports, licensing new technologies, software, certification or other such costs as agreed by the Department on a case by case basis
- The department may consider wage costs for an employee (not shareholder or director) with the assistance being paid on the actual costs, as verified by payslips. Such support would be considered on a case by case basis
- The maximum amount of assistance which may be claimed in relation to wages is £10,000
The department will review the Research and Development expenditure against the following criteria:
- The likely commercial potential of the product or service
- The likelihood of the project meeting its proposed objectives within 12 months
- The potential job creation
- The applicant’s track record
Please note: Grant assistance cannot be considered retrospectively for items of expenditure which have already been purchased.
How to apply/ the information you will need to submit
- A completed application form signed by a director or principal on behalf of the business
- A completed business plan which must include:
- Background and current/proposed location of the company
- CV’s and relevant experience of the management team
- Company details: date of registration, shareholders (to include percentages of shares owned), directors, beneficial owners etc. and links to other businesses
- The business model, long and short term objectives. Key customers and confirmed orders
- Staff structure including numbers of employees, types of jobs, wage rates
- Information on premises – owned, leased, rented and area. If rented or leased, details of landowners and annual costs
- Marketing plan: specifically, whether customers are off-island or on-island
- Financial information: copies of the audited accounts (if applicable), forward financial forecasts for 3 years ahead, including profit and loss figures together with a narrative explanation.
- A list of all items of expenditure on which assistance is being requested together with cost (net of VAT) and a narrative explanation. Also, the R & D requirements as set out above
- A one or two page executive summary that links the business plan, financial statements, marketing plan and application together to show clearly ‘at a glance’ how the potential assistance will benefit the business and the Island
- Any other material fact that could have an adverse impact on the business
- Any licensing, intellectual property or regulatory information
Grant assistance cannot be considered retrospectively for items of expenditure which have already been purchased.
Department of Economic Development
St George's Court
Upper Church Street
Isle of Man
+44 1624 687333