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Innovation loans: July 2019 open competition


Loans for game-changing innovations with strong commercial potential that will significantly improve the UK economy.

Innovate UK is offering up to £10million 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.

Projects should aim to develop new products, processes or services (or innovative use of existing ones) believed to be significantly ahead of anything similar in the field.

Your proposal can come from any technology and any part of the economy.

Projects must focus on commercialisation, growth or scale up. Priority is given to proposals likely to lead to growth and gains in productivity.

Projects should last up to five years, of which up to three years can focus on late stage research and development (R&D), and up to two more years on establishing a clear route to commercial success. Loan repayments will be required over a further period of up to five years.

Businesses must be able to show that they:

  • Can cover interest payments
  • Will be able to repay the loan on time
  • Need public funding

Open Date:


Close Date:


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

Innovate UK are looking to fund a portfolio of projects and businesses, across a variety of technologies and markets.

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

Innovate UK particularly welcome proposals from innovation-based businesses with significant ambition and potential for growth or scale up, and you will be expected to be able to show a clear route to commercial success for your project.

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

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

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.

An applicant can only submit one application per competition round. If more than one application per round is submitted, only the first application will be considered for assessment.

Innovate UK have allocated up to £10million to fund innovation projects in this competition through innovation loans to suitable SMEs.

Innovate UK will offer loans of between £100,000 and £1million. This is based on your project proposal and our judgement of the suitability and affordability of a loan for your business.

Innovation loans will be:

  1. Available for up to three years (the ‘availability period’) when the project is under way, but the exploitation has not yet started. You can borrow in stages (‘drawdowns’) during this period and will pay interest at 3.7% per annum on anything you borrow, with additional interest at 3.7% accrued and deferred until the repayment period
  2. Extended for up to tw years (the ‘extension period’) when the project is focused on developing the commercialisation of the product. You will not be able to make further drawdowns during this period. You will not have to make repayments but you will pay interest on the amount you have borrowed at 3.7% per annum, with additional interest at 3.7% accrued and deferred until the repayment period
  3. Repayable over a maximum of five years (the ‘repayment period’) after the availability and extension periods. You will have to repay anything you have borrowed, including interest accrued and deferred from the availability and extension periods, on a quarterly schedule. You will pay interest at 7.4% per annum on the outstanding loan amount

These are the longest periods we will consider. Your application should propose how long your project will last (including the availability and extension periods) and how long the repayment period should be. These should be based on the needs of your business. Innovate UK will consider the suitability of your proposed timings in any loan offer that they make to you.

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

In this competition, Innovate UK are not providing grant funding.

Innovate UK will not provide funds to “match” the grant funding of any other projects.

Cresco Innovation works with companies to develop and implement innovation strategies. We help client companies identify opportunities to develop new products and services, and then create a package of support to ensure that the idea is turned into a commercial reality.

Our services include securing grants (as a team we have raised around £40million over three years), business planning, IP advice, access to finance and funders, project management and IP commercialisation support.

We regularly act as the interface with the funding bodies and help clients ensure that their projects are properly managed to ensure the best outcome for all.

Call to find out more

If you’d like to know more about this competition, please give us a call on 01509 261182 and one of our team will be delighted to help you access this funding opportunity for your business.