Innovation Loans: July 2019 Open Competition

Overview

Innovate UK is offering up to £10 million in loans to micro, small and medium-sized enterprises (SMEs). Loans are for highly innovative late stage projects with the best game changing and/or disruptive ideas or concepts. There should be a clear route to commercialisation and economic impact.

Scope

The aim of this competition is to help businesses overcome barriers to the best cutting edge, game changing innovations becoming a successful commercial reality. This includes making a considerable economic impact and/or resulting in significant, sustainable business growth.

Your proposal must demonstrate:

• a clear game-changing and/or disruptive innovative idea
• that your idea can lead to innovative products, processes or services that are significantly ahead of others in the field or that it includes prototyping, demonstrating, piloting, testing and validation in environments that represent real life operating conditions
• a strong and deliverable business plan that addresses (and documents) market potential and needs
• a team, business arrangement or working structure with the necessary skills and experience to run and complete the project successfully and on time
• awareness of all the main risks the project will face, with realistic management, mitigation and impact minimisation plans for each
• sound, practical financial plans and timelines that represent good value for money
• a clear, evidence based plan to deliver significant economic impact, return on investment (ROI) and growth through commercialisation, as soon as possible after project completion

Your proposal must demonstrate:

• a clear, considerable potential to make a significant and positive impact on the UK economy and/or productivity
• realistic, significant potential for global markets

Eligibility

To take on an innovation loan for a project you must:

• be a UK based micro, small or medium-sized enterprise (SMEs)
• carry out your project in the UK
• intend to exploit the results from or in the UK
• give evidence that your business is suitable to take on a loan

Individuals, research organisations and large companies are not eligible for innovation loans.

Only single businesses can receive loans, so collaboration with other organisations cannot be funded in this competition.

Funding Costs

Loans of between £100,000 and £1 million are available to fund your project’s eligible costs.

You could 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 and will be a form of state aid. For experimental development projects this grant equivalent, as a proportion of the eligible project costs, can be:

• up to 45% if you are a micro or small business
• up to 35% if you are a medium-sized business

Projects should last up to 5 years and are expected to start by March 2020.

Exclusions

In this competition Innovate UK are not providing grant funding and will not provide funds to “match” the grant funding of any other projects.

Loans will also be declined for businesses:

• Innovate UK consider unable to afford the interest and repayments on the loan
• that have not demonstrated that they are unable to obtain finance from other sources on suitable terms