The key things you need to know about the latest round of Innovate UK’s Innovation Loans Future Economy scheme.
If you’re a UK-based SME looking for funding to take a late-stage R&D project to market, Innovate UK’s Innovation Loans Future Economy scheme could be worth exploring. Launched in 2022, the scheme offers loans of up to £2 million to help promising businesses to overcome the barriers to commercialising their innovation.
The loans have favourable terms, like below-market interest rates and lengthy repayment periods. While many Innovate UK grants only offer up to 70% of project funding, Innovation Loans can cover up to 100% of your project costs. The Innovation Loan scheme also has a lower bar for qualifying innovation and technical risk than most Innovate UK grants, making the scheme more suitable for later-stage projects.
Round 13 of the Innovation Loan Future Economy Competition is open until 6 March 2024. Here are the key things you need to know if you’re interested in applying.
Am I eligible for an Innovate UK Innovation Loan?
To make the scheme’s criteria easier to apply, I’ve broken them down into three areas: your company, your project, and your proposal.
If you want a quicker, more accurate understanding of your eligibility for Innovate UK Innovation Loans, just get in touch.
Over a short call, our specialists can give you an initial assessment of your suitability and chances of securing an Innovation Loan.
To apply for the Innovation Loans Future Economy Competition, your company must:
- Carry out your R&D project in the UK
- Prove that your business is in a position to take on a loan
- Be a UK-registered micro, small or medium-sized business (SME)*
- Plan on exploiting the results of your project in or from the UK
*Learn more about the definition of an SME for Innovate UK funding
Individuals, large companies, not-for-profits, charities, academic institutions, and research organisations are not eligible for this competition.
Your project can include prototyping, demonstrating, piloting, testing and validation. It must focus on one or more of the following themes:
- Health and wellbeing
- Net Zero
- Next-generation digital technologies
- Technology families
It can include both research and development and commercialisation phases and last for up to 5 years.
Innovate UK expects you to kick off your project by 1 August 2024.
The timing of your first drawdown hinges on the final decision by Innovate UK’s credit committee decision and the completion of loan documentation.
You must demonstrate to Innovate UK:
- A clearly expressed and compelling innovative idea
- A robust and deliverable business plan that addresses and shows evidence of market potential and needs
- A team with the necessary skills and experience to run and complete the project successfully and on time and take the outputs forward
- Awareness of all the main risks the project and business will face, with realistic plans to manage, mitigate and minimise the impact of each of these
- Sound, practical financial plans and timelines that represent good value for money and ability to repay the loan
- Why you are unable to fund the project from your own resources or other forms of public or private sector funding
- A clear, evidence-based plan to deliver significant economic impact, return on investment (ROI) and growth throug
What are the terms of an Innovation Loan?
If your application is successful, you’ll be able to access a loan on the following terms:
You are able to access the loan for up to 3 years while your project is underway. This is called the availability period. You’ll pay 3.7% interest on any money you borrow during this window, and you will accrue an additional 3.7% interest, which is deferred until the repayment period.
You can activate an extension period until you realise the first commercial sale of your project, up to a maximum of 2 years after the availability period. During the extension period, you will also pay 3.7% interest on money borrowed during the availability period while accruing the additional 3.7% deferred until repayment.
The repayment period lasts for up to 5 years after the end of the availability and extension periods. During this time, you will have to repay any money borrowed during the availability period in quarterly instalments, including interest accrued during the availability and extension periods. You will pay 7.4% interest on the balance you hold during this time.
Secure an Innovate UK Innovation Loan with help from GrantTree
Thinking of applying for an Innovation Loan? Innovate UK will decide whether you receive funding based on two things:
- The quality of your project proposal
- Your company’s suitability for debt financing
GrantTree is the only consultancy that offers extensive experience securing Innovate UK funding and the credit expertise needed to prepare a submission that compellingly ticks both of these boxes.
Our specialists have a 100% success rate when it comes to applying for Innovate UK Innovation Loans, so if you want to maximise your chances or find out if your company is suitable for the scheme, just get in touch.
We’re standing by to help!