Overview
Innovate UK is offering innovation loans to UK SMEs for late-stage R&D and pre-commercialisation with a clear route to market and economic impact. Loans back projects that deliver innovative products, processes, services or business models aligned to Innovate UK’s Future Economy themes.
Rounds: 24 (opens 23 Oct 2025, closes 7 Jan 2026) and 25 (opens 8 Jan 2026, closes 4 Mar 2026).
Scope
Eligible projects progress late-stage R&D through prototyping, piloting, testing and validation in near-real environments, and set out a credible plan to first commercial sales. You must evidence need for public funding, ability to service interest, and capacity to repay.
Key themes and topics
- Net zero: industrial energy/materials, agri-food emissions, capital intensity
- Health & wellbeing: tackling ill-health, enhancing wellbeing, diet & food
- Next-gen digital & tech families: advanced materials & manufacturing; AI; digital & advanced computing; bioinformatics & genomics; engineering biology; electronics, photonics & quantum; energy & environment tech; robotics & smart machines
Project duration
- Up to 5 years for R&D and pre-commercialisation (projects expected to start from 1 May 2026)
- Followed by a repayment period of up to 5 years
- Total loan term ≤ 7 years
Award value
- Loan size: £100,000–£5 million
- Coverage: up to 100% of eligible project costs (single-applicant only)
Funding terms (loan)
- Drawdowns: quarterly during the project period
- Interest during project: 3.7% p.a. on drawn amounts + 3.7% p.a. deferred (payable in repayment phase)
- Interest during repayment: 7.4% p.a. on outstanding balance
- Security: typically a debenture; no personal guarantees
- Pre-commercialisation costs eligible (UK Subsidy Control): selected labour for commercial readiness, market testing/validation, capital usage, tooling/materials, and up to 20% working capital supporting exploitation
- Windsor Framework (e.g. NI entities under State aid): pre-commercialisation limited to capital usage and tooling/materials
Eligibility criteria
- Lead applicant: UK-registered SME (single business only; collaborations not funded via this loan)
- Location: project carried out in the UK; results exploited in/from the UK
- Demonstrate: innovative idea, robust plan, capable team, risk management, value for money, need for public finance, and ability to repay
- Subcontractors: permitted (UK or overseas with strong justification)
- One application per round; cannot apply simultaneously to other innovation loan schemes
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