Company size – whether you’re a micro, small, medium (SME) or large company – has a significant impact on which Innovate UK grants you’re eligible for and on how much funding you can access. Here’s what you need to know.
Your company’s size can significantly impact your eligibility for an Innovate UK grant. And how much funding your company can claim if your application is successful.
For example, Innovate UK’s popular Smart grant competition – learn more about the latest round of Smart here – requires the application lead or at least one claiming partner to be an SME (micro, small or medium-sized enterprise).
As an illustration of this, Smart offers micro and small companies funding worth up to 70% of their project costs for feasibility studies lasting 6 to 18 months, up to a limit of £350,000. Large businesses, meanwhile, can only access funding worth 50% of their project costs, up to a maximum of £250,000.
Whether you are a micro, small, medium or large business is determined by limits set out by the Companies House Act 2006. Forming a core part of the government’s treatment of corporate accounts, these limits have ramifications well beyond grant funding.
We’ll go through each of these limits below. If you’re unsure which size your company qualifies as – and how it will affect your application – our grants experts would be happy to advise you. Just get in touch.
What is a micro company for Innovate UK grants?
To qualify as a micro company – or micro-entity, to use the government’s terminology – your company must meet at least two of the following three conditions:
- Your turnover is no more than £632,000
- The value of your balance sheet is not more than £316,000
- Your average employee headcount is not more than 10
Generally speaking, your company will qualify as a micro-entity in its first financial year, assuming it meets the conditions above.
To qualify as a micro entity after your first year, you need to meet the conditions in both your current financial year and the financial year previous.
There is a misconception that younger, pre-revenue companies are not eligible for grant funding. Thankfully this isn’t true – earlier-stage companies can still secure an innovation grant.
What is a small company for Innovate UK grants?
To qualify as a small company, your business must meet at least two of the following three conditions:
- Your annual turnover is no more than £10.2 million
- The value of your balance sheet is not more than £5.1 million
- Your average employee headcount is not more than 50
There are different criteria when considering account periods starting before 1 January 2016 – you can read more about them on the government website. However, as grants open and close in just a few months, you won’t need to worry about these figures for any upcoming application.
As with micro-entities, businesses often qualify as small companies in their first financial year, assuming they meet two of those three conditions. However, to qualify for a small company after your first financial year, you need to meet the criteria in both your current and previous financial year.
What is a medium-sized company for Innovate UK grants?
To qualify as a medium-sized company, your business must – you guessed it – satisfy two of these criteria:
- Your annual turnover is no more than £36 million
- The value of your balance sheet is not more than £18 million
- Your average employee headcount is not more than 250
Generally, your company will qualify as medium-sized in its first financial year, assuming it meets the conditions above.
To qualify as a medium-sized company after your first year, you need to meet those conditions in your current financial year and the financial year previous.
What is a large company for Innovate UK grants?
Predictably, a large company is one that exceeds at least two of the limitations of a medium-sized company. For completeness, we’ll spell them out.
Your business counts as a large company if meets two or more of these criteria:
- Your annual turnover is more than £36 million
- The value of your balance sheet is more than £18 million
- Your average employee headcount is more than 250
Questions about your company's size?
Those are the main criteria for determining a company’s size. However, there are other factors that can influence your company’s size, such as whether you are part of a group. Also, the impact of company size – and issues like incoming equity funding from investors – varies significantly depending on the grant you’re applying for.
If you’re unsure about how your company’s size affects your application, our grants specialists are standing by to help.
