It is evident from the coverage in Rail Professional that the UK continues to generate world-class rail and transport infrastructure innovation. The problem is that many great ideas remain on the drawing board for want of funding. In this article Matt Symonds of Consultants TBAT Innovation suggests ways in which you can improve your chances in your bid for finance.
I’m just out of a review meeting with our client Tedipay, the coordinators of a major digital technology project to revolutionise the way passenger travel ticketing and spend is managed. MultiPass is an 18 month collaborative project which was awarded over £1million from the Government’s Innovate UK ‘Enabling the Digital Railway’ programme to create a passenger-carried Smart card, easy to use and capable of triggering multi-modal payments. We worked with Tedipay’s founder Alex Peschkoff to secure the funding, and nearly one year on the work is progressing well.
Mind the gap
If we want Britain to innovate its way out of recession and into economic growth, we need to give confidence to those of you, like Tedipay, with the market insight and determination to bring new products to market. The gap between fundamental research and commercialisation will not be bridged by traditional business lenders; it’s too early for them to see a return on investment. Instead, we invariably turn to public-sector or charitable sources whose remit is to bring projects to the point at which they are eligible for follow-on funding or attractive to investors and high street lenders.
No funding shortage
Contrary to popular opinion, there is no shortage of funding but a shortage of quality, well-constructed and validated applications for those funds. Just a few minutes of online research into the big lenders and grant-awarding bodies will show that most are interested in market-changers and disruptive technologies which are scalable. That’s not to say that your research is insignificant; it might be that the realisable value comes from a collaborative approach with another company, the appointment of a strong management board or a change of direction which needs further investigation.
Where do I go for funds?
Once you have established the need for funding, it is important to get the right package of finance in place to meet those needs. The main grant funding body in the UK is Innovate UK . Innovate UK is in effect an arm of government which releases numerous grant funding schemes throughout the year. The main funding stream for innovative small and medium enterprises (SME) employing 1-249 people is the Smart scheme. Innovate UK also releases targeted calls throughout the year with the aim of increasing the UKs R&D ability, skills and competitiveness in selected industries. The rail and engineering industries are currently supported to do this through these schemes. Funding is available to companies from new start-ups through to large multinational companies and the majority of the funding is for R&D covering such project costs as labour, overheads, materials and subcontractor costs. Other, typically locally administered, grant funds can support capital investment as well as R&D costs.
Release the brake
It can be a time-consuming and often confusing process to identify and then apply for funds, which is why so many innovators turn to consultants for guidance. Grant funding is about applying to the right fund at the right time and you might not hear about many of these funding opportunities. When you do, my guess is that you will be too busy running the business to give the funding application the attention it deserves. We receive daily updates on the latest round of funding from major public bodies and any changes to legislation on the treatment of tax exemptions. A significant proportion of innovative med tech ideas come from small and medium enterprises (SME) but left to cope on constrained budgets, these ideas would be far slower to develop and therefore later into the marketplace, or might never complete at all.
Read the small print
Grant funding assessors are looking for two things when reading an application; one is a high level of innovation which is bringing something better, faster, smaller, cheaper to the market and secondly a high level of technical risk for the company. Without these two factors grant funding bodies will often reject the application. A grant funding application consists of a set of questions, supporting appendices, business/project plans and financial information. As the size of the grant fund increases the complexity of these sections also increases.
I advise anyone applying for grant funding to read the guidance notes carefully as these give a good indication of what the assessors are looking for. Then answer the questions concisely. We recommend starting the application process at least 4 weeks prior to submission deadline to be sure you have enough time to gather all the required information and supporting documents. Ask a colleague who is not involved with the project to review the application, and give you honest, practical feedback.
Full steam ahead
HMRC figures show that only 28,500 SME’s have applied for R&D tax credits – about 10% of the over £2m VAT registered businesses. It is massively under accessed by companies. TBAT consultants specialise in finding the innovation tucked away in companies and maximising R&D Tax claims. The same poor level of uptake on companies accessing grants is true. Although some funding calls may be oversubscribed, they are also oversubscribed with low quality applications. Companies who have great ideas, with a well written application have a better chance of securing funding.
Some rail sector companies are excellent at applying for and securing considerable amounts of R&D grant funding and Tax credits whilst others have much to learn. Using an expert to assist in securing either grant or R&D funding greatly increases the chances of success. However, choose wisely. Look for honesty and transparency, make sure it is your project which the company needs that is being funded, not a project that the expert says will get funded. Be aware of experts who insist on being an integral part of the delivery post grant award. It is your project and you should use support you know and trust. Always consider a risk and reward fee structure as it shows commitment and belief from both parties. Consider that the national success rate for securing R&D funding is between 15 – 18%, TBAT has a success rate over 80%.
Typically, a Consultant can help to scope out an appropriate project, write the grant funding application and its associated forms and then submit all documents to the awarding body for review. However I recognise that this brief article has only touched on the vast subject of funding. TBAT Innovation has just launched monthly Funding Clinics which are open to anyone involved in rail innovation. These are free and impartial, allowing either face-to-face or Skype-enabled discussion or advice. I’d like to meet you and hear more about your early ideas or ongoing innovation.
To book a TBAT Funding Clinic, email firstname.lastname@example.org for dates and more information.
Alternatively, if you’d like to get in touch with us, please use our contact form, or give us a call.
Read our guide to a successful Innovate UK Grant Application, addressing the key areas and questions, with a few top tips along the way!
Innovate UK Launchpads is a program designed to uplift emerging clusters of small and medium-sized enterprises (SMEs) in the UK. Tailored to specific geographic clusters, each Launchpad welcomes businesses of all sizes, extending innovation funding, support services, and networking opportunities. Discover the current Launchpad funding opportunities.
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