+44 (0)1509 261182

Innovation loans: September 2019 open competition


Innovate UK is offering up to £10million in loans for game-changing innovations with strong commercial potential that will significantly improve the UK economy.

Loans are available to micro, small and medium-sized enterprises (SMEs) and 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.

Your project should aim to develop new products, processes or services which are significantly ahead of anything similar in the field. You can also propose an innovative use of existing products, processes or services.

Your proposal can use any technology from any part of the economy.

Your project must focus on commercialisation, growth or scale up. Innovate UK will give priority to proposals likely to lead to growth and gains in productivity.

You must be able to show that you:

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

Open Date:


Close Date:


The purpose of this competition is to help businesses overcome barriers to their cutting-edge innovations becoming a successful, commercial reality. The aim is to make a considerable economic impact and/or result in significant, sustainable business growth.

Your idea must lead to innovative products, processes or services that are significantly ahead of others in the field. Your project can include prototyping, demonstrating, piloting, testing and validation in environments that represent real life operating conditions.

Your proposal must demonstrate:

  • A clear game-changing and/or disruptive innovative idea
  • 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.

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. Innovate UK will require loan repayments over a further period of up to five years

Innovate UK will decline loans for businesses which:

  • They consider unable to afford the interest and repayments on the loan
  • Have not demonstrated that they are unable to obtain finance from other sources on suitable terms

Innovate UK will evaluate whether your business is suitable to receive an offer of a loan for your project.

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

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

Projects must last up to five years and are expected to start by May 2020.

To take on an innovation loan for a project you must:

  • Be a UK-registered SME
  • 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, academic institutions, 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.

Your organisation can only submit one application per competition round. If you submit more than one application, only the first application will be considered for assessment.

Innovate UK have allocated up to £10million in this competition to fund innovation projects 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 two 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 Innovate UK 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.

Innovate UK expect to take security where it is available, including a mortgage debenture and charges over assets purchased and intellectual property developed with the proceeds of the loan. Innovate UK will not require personal guarantees.

More details of Innovate UK’s approach, including a summary ‘heads of terms’ document setting out the main terms and conditions of the loans, are included in the terms and conditions for this competition.

This competition provides state aid funding under article 25, ‘Aid for research and development and innovation’, of the General Block Exemption Regulation (GBER). It is your responsibility to make sure that your organisation is eligible to receive state aid.

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

Innovate UK expect that most innovation loans will meet this requirement. The general guidance on innovation loans contains more information to explain the grant equivalent calculation for an innovation loan.

Innovate UK are not providing grant funding in this competition.

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.