New low cost Innovation Loans announced up to £1m for UK Research & Development projects
Innovation loans for research and development (R&D) projects were first mooted some time ago. It’s good to see that they are now official having been announced at Innovate2017 annual conference, hosted by Innovate UK in Birmingham this week.
The initial innovation fund is set at £50m to be allocated as loans under a pilot project over a two year period up to the end of 2019. It is for “small and medium enterprises (SMEs) involved in late-stage innovation projects”.
“A late-stage R&D project is one which builds on a new idea but has not yet reached the point of commercialisation.”
“It may include activities such as prototyping, demonstrating, piloting, testing and validation in environments that are representative of real-life operating conditions.”
Loans will be made by Innovate UK Loans Ltd and will be given to successful applicants at a very low interest rate as compared to most commercial loans.
The UK Government’s aim in setting up the innovation loans fund is “to give businesses support to gain the competitive edge and also grow the UK economy.”
They say no personal guarantees will be required which is good news, however they do plan to secure the innovation loans where they can, such as against assets purchased or intellectual property developed as a result of receipt of a loan.
As the loans will be provided at a very low interest rate they will qualify as State Aid under European rules so that may complicate assessments of whether the UK Government’s R&D tax offset schemes are also available in respect of R&D costs that are paid for using the loans.
State Aid rules set a limit on what portion of your R&D innovation project can be funded using State Aid. Applicants that are already in receipt of grants that are classified as State Aid will need to look at any implications of the State Aid rules when applying for an Innovation Loan.
Applications for Innovation Loans are being managed under a competitive process with themed competitions periodically announced. If you are interested in securing a loan, as with all Innovate UK funding competitions, you will need to keep an eye on what is coming up.
Are you ready to find out if you qualify or how much your R&D claims could be worth?