Supporting startups, scaleups and established SMEs, Innovation Loans provide up to £2 million in flexible debt financing with attractive terms like below-market interest rates and repayment periods of up to seven years.[1]

This article will help you understand whether Innovation Loans are right for your business and explain the key things you need to know about this potentially lucrative scheme, starting with everyone’s biggest question: am I eligible?

Am I eligible for an Innovation Loan?🔗

To qualify for an innovation loan, your company must:

• Be a UK-registered SME
• Be looking to undertake a late-stage R&D project
• Be able to make interest payments and repay the loan on time
• Have a clear route to commercialisation

In addition, your R&D must be focused on one or more of the following areas:

• Health and wellbeing
• Net Zero
• Next-generation digital technologies
• Technology families

To clarify a few terms:

An SME is a company that meets two of the following three criteria:

• A turnover of no more than £36 million
• A balance sheet worth, on average, less than £18 million
• An average employee headcount of less than 250

Now, I understand that, even when the criteria are broken down like this, it can be hard to know whether your company and project qualify. If you aren’t sure whether your business and R&D are suitable, it’s best to get input from a grants consultant. [2]

Most reputable grants consultants will be happy to give you a good sense of whether you’re eligible for any of the competitions they can help you with before pressing you to sign on the dotted line.

Are Innovation Loans right for my company?🔗

Obviously, I can’t say definitively whether Innovations Loans are right for your individual business.

However, I can tell you that Innovation Loans are geared towards businesses in specific situations, facing particular obstacles to advancing their R&D and/or scaling their innovation.

If these situations and obstacles apply to your company, an Innovation Loan might be the solution.

Your R&D has reached an advanced stage and is no longer risky enough for grant funding

You have a promising project but can’t fund it from your own resources or through other forms of public or private sector funding

Developing your project further would unlock new kinds of funding, especially equity investment, on more favourable terms

How do I apply for Innovation Loans?🔗

The application process has two main parts.

Business and financial information - This first part of the application examines your company’s background and structure and its ability to pay back the requested loan.

This part of your claim is evaluated by the Innovate UK Credit team.

Project details and finances - The second component of the application explores your project: who’s going to deliver it, how you’d invest the loan, what the market opportunity is, and so on.

This section is judged by three independent assessors. Their scores are combined to give you an overall total, which will decide whether you are eligible for funding.

What score you need to attain will vary depending on the strength of the other applications submitted to the round you’re applying to.

Preparing a competitive application can take anywhere from several weeks to a few months, depending on how experienced you are in applying for Innovate UK funding.

Conclusion🔗

Financing from Innovate UK’s Innovation Loan scheme can be a fantastic way for you to fund late-stage R&D, propelling your promising product or solution towards commercialisation.[3]

If you want to learn more about Innovation Loans, my colleagues and I at GrantTree are here to help. As part of Praetura’s network, we would be delighted to offer you a free, no-commitment eligibility assessment covering your company and your development roadmap.

To book your eligibility assessment, just get in touch.