UK registered businesses can apply for loans for innovative projects with strong commercial potential to significantly improve the UK economy.
Programme: Innovate UK
Award: Share of up to £25 million
Opens: 9th Nov 2023
Closes: 10th Jan 2024
Innovate UK is offering up to £25 million in loans to micro, small and medium sized enterprises (SMEs). Innovate UK innovation loans are for highly innovative late stage research and development (R&D) projects with the best potential for the future. There must be a clear route to commercialisation and economic impact.
Your project must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.
Your project must focus on one or more of the future economy areas included in the Innovate UK plan for action.
You must be able to show that you:
The funding available will be allocated across a series of competitions with the next round opening on the day the previous round closes:
In applying to this competition, you are entering into a competitive process.
This competition offers loans to help businesses overcome barriers to their innovations becoming a successful, commercial reality. The aim is to make a considerable economic impact which results in significant, sustainable business growth.
Innovate UK is looking for businesses who can demonstrate that their projects have the best potential for the future.
Your idea must lead to innovative new products, processes or services that are significantly ahead of others currently available or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.
Your proposal must demonstrate:
Your project can include:
These can be in environments that represent real life operating conditions.
Innovate UK are also particularly interested in receiving applications from diverse businesses involving communities that are typically under-represented. This includes regions outside the ‘Golden Triangle’, London, Oxford and Cambridge, or with, for example, female, ethnic minority and diverse ability founders.
Your application will be evaluated on:
Innovate UK will decline applications for loans for businesses which:
Your project must focus on one or more of the following themes or sub-themes:
Health and wellbeing
Next generation digital technologies
You can apply for a loan of between £100,000 and £2 million to fund your project’s eligible costs.
Projects can last up to 5 years, including both the R&D and commercialisation phases. Projects are expected to start by 1 June 2024. Your exact project start date and first innovation loan drawdown will depend on the timing of the final credit committee decision and completion of loan documentation.
To receive an innovation loan for a new project you must:
Innovate UK will evaluate whether your business is suitable to receive an offer of a loan for your project.
Individuals, large companies, not for profits, charities, academic institutions, and research organisations are not eligible for innovation loans.
Only single businesses can receive loans, so collaboration with other organisations cannot be funded in this competition.
You must only include eligible project costs in your application.
You are responsible for entering your own project costs in the application.
Under current restrictions, this competition will not fund any procurement, commercial, business development or supply chain activity with any Russian or Belarusian entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian or Belarusian source.
Subcontractors are allowed in this competition.
Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.
You can use subcontractors from overseas but must make the case in your application as to why you could not use suppliers from the UK.
You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.
All subcontractor costs must be justified and appropriate to the total project costs.
Number of applications
Your business can only submit one application per round of this competition. If you submit more than one application, only the first application will be considered for assessment.
You can use a previously submitted application to apply for this competition.
In this competition we are not providing grant funding.
Innovate UK will not provide funds to match the grant funding of any projects.
Innovate UK will not fund commercial activities such as marketing and sales.
Innovate UK cannot fund projects that are:
Up to £25 million has been allocated to fund innovation projects across the current rounds of this competition.
Innovate UK will offer loans of between £100,000 and £2 million, based on your project proposal and our judgement of the suitability and affordability of a loan for your business. The Innovate UK Loans Ltd credit committee will decide the final terms, amount and length of the loan offer.
Innovation loans will be:
These are the longest periods we will consider. The overall term of the loan must not exceed 7 years. Your application must propose how long your project will last, including the availability and extension periods, and how long the repayment period you are requesting, will be.
These periods must be based on the needs of your business. We will consider the suitability of your proposed timings in any loan offer that we make to you.
Innovate UK expect to take security in the form of a debenture. Innovate UK will not require personal guarantees.
More details of our approach, including a summary ‘heads of terms’ document setting out the main terms and conditions of the loan, is in the terms and conditions for this competition.
You can get a loan of up to 100% of your eligible project costs. Since the loan will have favourable terms, particularly a below-market rate of interest, the value of this benefit over the life of the loan will be the equivalent of a grant.
The gross grant equivalent will be the present value of the difference between the market cost of interest and fees of a similar loan, using reference rates for interest, and the cost of an innovation loan. The present value is determined at the date of commitment of the loan.
For experimental development projects this grant equivalent, as a proportion of the eligible project costs, can be:
Innovate UK expect that most innovation loans will meet this requirement.
Book an appointment to speak to one of our advisors to discuss your eligibility to apply for this Grant Funding opportunity.