Support for Micro Enterprises and Farm Diversification

Funds under this priority will be used to provide grants for:

  • developing or starting rural micro and small businesses; and
  • farm diversification projects (for example, contracting services).

Who can apply

These grants are for:

  • micro and small businesses based in rural locations, including social enterprises;
  • people who want to start a business that is in a rural area; and
  • farming businesses that want to diversify (expand into non-farming activities). Grant limits

Grant awarded under this priority to projects making an economic gain are awarded under de minimis state aid rules* or capped at 40% of the project’s eligible costs, whichever is the lesser. The maximum grant that Rural Surrey LEADER LAG will normally offer is £50,000.

A grant rate of 100% may be available for investments which are non-profit making operations that will not generate an economic gain. However, the Rural Surrey LAG will not normally support enterprises at a grant rate of more than 40%.

State aid rules

* De minimis state aid regulations mean that a maximum of €200,000 (currently around £145,000) of Public Funds is available to any one applicant in any rolling period of 3 financial years. If an applicant has had other public funding this may count towards the de minimis aid amount and reduce the amount of money they can apply for from LEADER. Please note that Basic Payment Scheme and Countryside Stewardship payments do NOT count towards the de minimis limit.

What is eligible

Grants can be used for:

  • starting a new business;
    • construction costs or establishment costs for workshops, factories, premises and facilities;
    • purchasing equipment (not consumables);
    • processing and marketing of agricultural products;
  • social service provision;
  • developing craft and handicraft activities;
  • setting up an IT business; and
  • leisure, recreational and sport activities.


Costs could include:

  • construction, acquisition (including leasing) or improvement to immovable property;
    • the purchase or hire purchase of new and second hand machinery and equipment
    • general costs such as architect, engineer and consultation fees (restricted to a maximum of 15% of total project costs);
    • intangible investments including, acquisition or development of computer software;
    • acquisition of patents, licences, copyrights, trademarks;

What isn’t covered

The following are not eligible:


  1. costs for standard agricultural equipment and inputs, like animals and annual crops;
  2. costs of agricultural production rights and payment entitlements;
  3. costs of getting any consents needed, for example planning permission;
    1. costs for anything that’s a standard industry obligation, for example requirements of the Basic Payment scheme
    2. costs that are incurred before the date of the grant funding agreement;
    3. financial charges, such as interest, fines and maintenance;
    4. reclaimable VAT;
    5. any items already subject to EU or national funding;
    6. projects the applicant is required to do to meet a legal or statutory requirement;


10. like for like replacements of existing items such as buildings, equipment and machinery;


11. costs connected with a leasing contract, such as lessor’s margin, interest refinancing costs, overheads and insurance charges;


12. salaries and running costs for commercial business applicants;


  1. long term salaries and running costs for community or not for profit projects;


Note - Some limited salary costs associated with the development of the project may be eligible but would cease as soon as the project was running. Eligibility of these costs will be considered on a case by case basis and will only be considered where the business need is clearly articulated and directly linked to supporting rural jobs and growth.


  1. like for like relocation of the business;


Note - if the business needs to relocate in order to expand it can only apply for funding towards the costs of the expansion.


  1. own labour;
  2. in-kind contributions;
  3. licence fees, subscriptions and service charges;
  4. standard computer and mobile equipment; and
    1. costs for plant and equipment directly associated with the generation of energy from renewable sources which are supported through the Renewable Heat Incentive (RHI) or Feed-In Tariffs (FITs).