These are a great source of financing for your rural social enterprise.

Grants are non-repayable funds given by one party (often a government department, foundation, or trust) to a recipient (social enterprise, business, or individual). In order to receive a grant, you are usually always required to fill out a grant application – detailing what you will use the money for.

Grants are often made to fund a specific project or set of goals, and might require a level of compliance and reporting. You may have to prove that you are meeting the goals stated in your grant proposal and provide evidence of this.

The major providers of grant funding will differ from country to country, but are generally provided by governments, government agencies, and support organisations who exist to support and develop social enterprise. Grants are also commonly offered by foundations, private companies, and lotteries.

Getting grants can be tough – there may be strong competition and the criteria for awards are often stringent. Some grants require you to match the funds you are being given, the amount of match funding required varies, depending on the granter.

Generally, you will need to provide:

• A detailed project description
• An explanation of the benefits of your project
• A detailed work plan with full costs
• Details of relevant experience and background on key managers

At a European level, there are various funding programs and grants available, such as: the European Regional Development Fund, the European Social Fund, and the European Agricultural Fund for Rural Development. At an international level, there is also the International Fund for Agriculture Development.

Business incubators or ‘accelerators’ provide support for new businesses in various stages of development. However, there are also local community development incubators, which focus on areas such as job creation for rural community members, community revitalisation, and partnering to host and share services.

Commonly, business incubators help new and start-up businesses to develop by providing services such as management training or office space. As well as sharing or providing premises, incubators may offer share their administrative, logistical, and technical resources.

Generally, the incubation phase can last up to two years, and once the product or service is ready, the social enterprise will leave the incubator’s premises to start out on its own.

The Welsh ICE (Innovation Campus for Enterprise) is based in Wales, in the UK, and offers co-working spaces at reduced rates for start-up enterprises. The benefits of working in close proximity to other start-up enterprises results in natural referrals, partnerships, and peer support networks. The Campus also host expert workshops, advice surgeries and mentoring.

Read more about the Welsh ICE here.

Another source of financing for rural social enterprises is through fundraising, donations, and sponsorships. For rural and community-owned enterprises, fundraising and charity events can be a good way to raise funds via donations from individuals, groups, and businesses.

Holding fundraising events in your community can be a good way of encouraging local stakeholders to get involved and make a donation to your cause. You may also discover potential partnerships, and be able to pool resources and expertise.

This is a source of financing for member-based organisations. Membership organisations offer specific benefits to their members, including:

• Professional association with a well-known and respected organisation
• Perks such as free consultancy and support, or discounts to conferences and other events
• Networking opportunities with people and groups (locally, regional, national, or international, depending on the type of organisation)
• Membership organisations also sponsor industry awards, which shine a light on outstanding work that should be showcased, but might otherwise remain undiscovered

Venture capital is not necessarily for all entrepreneurs. Generally, venture capitalists are looking for technology-driven businesses and companies with high-growth potential in sectors such as information, technology, communications, and biotechnology. Therefore this might not be for all rural entrepreneurs.

It is worthwhile to note that venture capitalists take an equity position in the company to help it carry out a promising but higher-risk project. This involves giving up some ownership or equity in your business to an external party. Venture capitalists also expect a healthy return on their investment, often generated when the business starts selling shares to the public.

Rural enterprises that are already selling their product or service, typically use venture capital funding to promote, establish and scale their business. An external round of funding becomes necessary for hiring key resources as well, regardless of the fact that they may or may not be profitable.

Therefore, this money can be used for:

• Advertising and brand visibility
• Distribution of the product or service
• Entering new markets, engaging with different demographics
• Achievement of defined goals and sales targets
• Expanding a team
• Infrastructure: equipment, office space, salaries
• Scaling the start-up

When starting a business, including a rural social enterprise – your first investor should be yourself. Either with your own cash and personal savings, or with collateral on your assets (building, land, machines, trucks, skills, etc). This proves you have a long-term commitment to your project and that you are ready to take risks.

This is typically the very first investment of money, used for market research, and development of the product or service. Often when applying for grant funding, the funder may require you to put up an amount of your own money – to show that you are serious about your project.

This is money loaned by a spouse, parents, family, or friends, which can be ‘returned’ later as your rural social enterprise goals are accomplished and you yield a return. This further investment of money is also used for the beginning stages of market research and the development of the product or service.

When borrowing love money, you should be aware that family and friends rarely have much capital and they may want to be part of the social change projected to happen. Not all start-ups need seed funding, but in some cases it is critical in order to get a start-up out of its infancy and bring the product or service to market.