Welcome to Innovation Grant Funding 101, GrantTree’s introductory guide to R&D grants for businesses in the UK.
This guide covers key information about how innovation grant funding works in the UK, including what grant funding is, the different kinds of grants available, and which projects are eligible.
If you’re new to the world of grant funding and are interested in exploring your company’s options, you’ve come to the right place!
- What are innovation grants?
- What is Innovate UK?
- Forms of grand funding
- How much funding can I get?
- Which projects are eligible for funding?
1) What is grant funding?
Innovation grants are a form of non-dilutive funding available to UK businesses undertaking innovative R&D work in the UK.
Grants can be held solely by a business or in partnership with one or more organisations like a university, a Research Technology Organisation (RTO) or another business.
Grant funding can be used to fund a wide range of activities, from market research and experimental development, all the way to prototyping and (through loans) early-stage commercialisation.
To be eligible for most British grants, the R&D work must be carried out in the UK and the results of the project must be exploited in the UK too.
2) What is Innovate UK?
A large portion of British R&D grants come from an organisation called Innovate UK.
Innovate UK is a non-departmental public body that is responsible for delivering growth by investing in business-led innovation projects.
Founded in 2007, Innovate UK is part of UK Research and Innovation and reports to the Department for Business, Energy & Industrial Strategy (BEIS). It has an annual budget of £6 billion.
3) Forms of grant funding
Below are the main forms of funding offered by Innovate UK on a regular basis.
Each type of grant and competition has its own scope and eligibility criteria. So be sure to read the fine print before you think about applying.
Grants from the Small Business Research Initiative, commonly known as SBRIs, are government contract-specific grants with a 100% funding rate. In other words, they provide winners with 100% of their funding costs. Historically SBRIs have been awarded for work in areas such as digital health, waste reduction and cybersecurity.
SMART is Innovate UK’s largest open call competition. These grants look to develop projects that surpass the state-of-the-art in a range of sectors and technological fields.
Catalyst competitions aim to increase the pace of innovation in a specific sector. Primarily Agri-tech, Biomedical Sciences and Energy.
Investment Accelerator opportunities are slightly different as they offer a combination of non-dilutive funding from Innovate UK and equity investment from a pre-allocated investor pool. These opportunities focus on specific fields and new competitions are announced on a regular basis. Historic examples include digital health, VR/AR/XR, and Insurtech.
This is by no means an exhaustive list of the types of grant funding available from Innovate UK. But it does cover most of the funding available.
Innovate UK also runs various themed competitions throughout the year. These relate to specific sectors, such as Agri-tech, Quantum, Plastics and Energy.
But the list above gives you a good flavour of what’s out there, and available to your business.
A full list of the current Innovate UK grant funding opportunities can be found on the Innovate Funding Portal.
4) How much funding can I get?
Innovate UK grants range from £25,000 to £2.5m.
The amount of funding you can receive depends on five factors:
- The scope of the grant competition you are applying for
- What type of work you are doing
- Whether or not the project is collaborative
- The length and requirements of your project
- The size of your company
Most grants will require you to match fund a portion of the overall project costs. So make sure you can cover these costs before you apply.
All grant programmes will have different funding levels with different stipulations.
For example, SMART has two streams of funding:
- Projects that are 6-18 months long can apply for up to £500k
- Projects of 19-36 months in length can apply for up to £2m, but must be collaborative (i.e. include partners).
The type of work you are proposing to carry out in your project will also impact the level of funding you receive.
Feasibility studies (TRL3) and Industrial research (TRL4-5)
Up to 70% of total project costs funded if you are a micro or small organisation, up 60% if you are a medium-sized organisation and up to 50% if you are a large organisation.
Experimental development (TRL6)
Up to 45% if you are a micro or small organisation, up to 35% for medium-sized organisations and up to 25% if you are a large organisation.
5) Which projects are eligible for funding?
Fundable projects are ones that balance technical and commercial risk in a compelling narrative that justifies government intervention.
The R&D behind your technology must also be fundamentally challenging, uncertain and risky.
Your product/solution must service a large or growing market need with significant commercial potential.
A successful project proposal must also include these key features:
- A project idea that is innovative, game-changing and/or disruptive that is significantly ahead of others in the field
- A strong project team and/or advisory board that is well placed to undertake and successfully complete the proposed project
- ROI: Proposals must evidence the potential for a project to lead to a significant return on investment (ROI) and lead to the growth and scale-up of the business as well as a significant ROI for the government and the UK economy
- Value for money to both the UK taxpayer and Innovate UK
I hope this article has given you a better understanding of innovation grant funding in the UK.
If you’re thinking of applying for a grant, do make sure you check out these other useful resources on our website.