Innovation loans: September-November 2019 open competition
Innovate UK is offering up to £10 million 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.
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. We 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
Projects must last up to 5 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.
Terms of repayment
Innovate UK will offer loans of between £100,000 and £1 million. 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 3 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 2 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 5 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. We will consider the suitability of your proposed timings in any loan offer that we make to you.
We 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. We will not require personal guarantees.