Innovation Loans Expression of Interest

Overview

Innovate UK, part of UK Research and Innovation, is offering loans to UK registered micro, small and medium sized enterprises. Innovation Loans are for highly innovative, late-stage research and development projects with strong commercial potential. Projects must have a clear route to commercialisation and economic impact.

Projects must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. Projects can also involve a new or innovative business model.

Projects must focus on at least one of the following six Industrial Strategy sectors:

• Advanced Manufacturing
• Clean Energy
• Creative Industries
• Defence
• Digital and Technologies
• Life Sciences

Scope

This is an Expression of Interest for an Innovation Loan. If the Expression of Interest is approved, applicants will be invited to submit a full application.

Innovate UK innovation loans are for highly innovative late stage research and development (R&D) projects undertaking experimental development with the best potential for the future. There must be a clear route to commercialisation and economic impact.

Your project must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.

Projects must demonstrate:

• a clearly expressed and compelling innovative idea
• a robust and deliverable business plan that addresses and shows evidence of market potential and needs
• a team with the necessary skills and experience to run and complete the project successfully and on time, and take the outputs forward
• awareness of all the main risks the project and business will face, with realistic plans to manage, mitigate and minimise the impact of each of these
• sound, practical financial plans and timelines that represent good value for money and ability to repay the loan
• why the project cannot be funded from the applicant’s own resources or other forms of public or private sector funding
• a clear, evidence-based plan to deliver significant economic impact, return on investment and growth through commercialisation, as soon as possible after project completion

Projects can include:

• prototyping
• demonstrating
• piloting
• testing
• validation

These can be in environments that represent real-life operating conditions.

Innovate UK encourages innovation involving communities that are typically under-represented, including:

• from regions that have historically accessed lower levels of investment, outside London, Oxford and Cambridge
• ethnic minority groups
• women and other marginalised genders
• people with disabilities
• people with non-traditional education backgrounds

Applications from businesses from these communities are particularly welcomed.

Applications will be evaluated on:

• the quality of the project proposal
• the financial information submitted
• the suitability of the business to take on a loan

Key themes and topics

Projects must primarily focus on at least one of the following sectors within the UK Government’s Industrial Strategy:

• Advanced Manufacturing: includes aerospace, advanced materials, agri-tech, automotive, batteries, and space industries
• Clean Energy Industries: focuses on wind, including onshore, offshore, and floating offshore, fusion energy, nuclear fission, hydrogen, carbon capture usage and storage, and heat pumps
• Creative Industries: encompasses advertising and marketing, film and TV, video games, music, performing and visual arts
• Digital and Technologies: covers artificial intelligence, engineering biology, advanced connectivity technologies, quantum technologies, semiconductors, and cybersecurity
• Defence: focuses on drones and autonomous systems, combat air, directed energy weapons, complex weapons, and maritime capabilities. It encompasses dual-use and civil-applicable innovations that strengthen the UK’s advanced engineering and security capabilities while maintaining export compliance and ethical standards
• Life Sciences: includes pharmaceuticals and medical technologies

Financial Services, and Professional and Business Services sectors are not in scope for Innovation Loans.

Innovate UK will fund experimental development projects only, as defined in the guidance on categories of research.

Applications will be declined for loans where businesses:

• are considered 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
• do not align with the UK Government’s Industrial Strategy, specifically in the six sectors listed in Specific themes

Projects cannot be funded if they are:

• dependent on export performance: giving a subsidy to an organisation on the condition that it exports a certain quantity of its products to another country
• dependent on domestic inputs usage: giving a subsidy to an organisation on the condition that it uses a set percentage of UK components in their product

Project duration

Up to 60 months

Loan term must not exceed 7 years

No fixed deadline

Award value

Loan funding request between £100,000 and £5 million

Note this is an Expression of Interest for an Innovation Loan. If the Expression of Interest is approved, applicants will be invited to submit a full application.

Funding rates

Up to 100% of eligible project costs through an innovation loan

Eligibility criteria

• Projects must be led by a UK registered micro, small or medium sized enterprise
• This competition is for single applicants only (not collaborative)
• Subcontractors must be preferably UK-based with fully justified and appropriate costs
• All funded project work must be carried out within the UK
• Projects must intend to exploit the results from or in the UK
• Applicants must show they need public funding, can cover interest payments and will be able to repay the loan on time
• Individuals, large companies, not for profits, charities, academic institutions and research organisations are not eligible
• Subsidy control and state aid rules apply