Match funding for grants explained – what is it?

Business grants can be a crucial source of funding for small businesses. They can help businesses expand, research and develop new products or invest in training and equipment. Business grants are usually awarded by the government or other companies but, unlike a loan, they do not need to be repaid. 

When researching business grants you might come across the term ‘match funding’. It’s important to understand exactly what match funding means and how it could potentially impact your business. Here, we explain all you need to know about how match funding works.

What is match funding for grants?

Match funding for grants means that in order to receive a particular business grant, you will need to put up some of your own funds. Grant organisations might request match funding to give them the reassurance that you are serious about the project being invested in and that you are able to raise adequate funds to support it.

How does match funding work?

With match funding, you as the business agree to put up a certain percentage of the total funding required, and the partner organisation will provide the rest. Often, businesses will provide match funding in the form of a loan, but there are other options, as we explain below.

As with all grants, match funding criteria can vary widely, so it’s important to research your options carefully to be sure you are applying for the right option for your business.

What is charity match funding?

Charity match funding works slightly differently to grant match funding. Here, a foundation or organisation agrees to match fund the money raised by employees for registered charities. 

Organisations that carry out match funding can include supermarkets, banks and building societies, insurance companies and car manufacturers.

Employees will need to apply for match funding and be actively involved in fundraising events to qualify. Money raised must be for a charity or a not-for-profit organisation, and it is likely that an upper limit on match funding will apply. 

What are the different types?

There are a number of different types of match funding. Some typically provide up to 50% of the project cost and you must provide the remaining 50%. However, other schemes will provide up to 70% of the project cost, meaning you only need to stump up 30%.

With cash or ‘actual’ match funding, you will need to provide the cash to meet the match funding requirements yourself. This might come from money built up in reserves or made through trading. Or it might be via a loan.

Alternatively, in-kind match funding means that you could match staff time or volunteer time. In other words, you use the time that someone works on the project as match funding. To do this you will usually need to show dated timesheets and a full description of the work carried out.

If you are claiming the value of volunteer hours, you will need to outline how you will keep accurate records and provide evidence of the costs, as well as show that the work they are doing is solely for your project. 

If you are claiming for staff time, and a member of staff worked 35 hours a week on the project, for example, you would only be able to claim for 17.5 hours of the time, and the remaining half of the salary would be paid by the organisation. 

Finally, public funding can also be used for match funding – for example, if you receive funding from a public body such as a council or trust. 

Advantages of match funding

One of the biggest advantages of match funding is that it reduces risk for both the provider of the grant and the business that receives it. By having two parties invest funds, the cost burden is reduced and the project risk is shared. What’s more, when multiple parties invest in a project, there are more people to collaborate and support the project, boosting its chances of success. 

Another advantage is that match funding is often a more effective way of raising funds compared to other, more conventional methods. Even if a business invests only a small amount of its own money, this can result in the business being offered a larger grant than it would have received through more traditional funding options.

Example of match funding

• Let’s say you apply for a grant of €20,000 that requires at least 50% of match funding from either another funder, in-kind or cash. 
• This means you must have at least 50% of match funding of the €20,000 grant requested and the organisation will provide the remaining 50%.
• You might provide this €10,000 through taking out a loan or volunteer hours.

How do I find match funding?

If you’re looking for match funding, or you want to take out a loan to help you with match funding, the team of experts at Swoop will be happy help find a solution unique to your business. Register with Swoop to get started.