Funding competition Innovation loans: July 2019 open competition

Loans for game-changing innovations with strong commercial potential that will significantly improve the UK economy.

This competition is now closed.

Register and apply online

Competition sections


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.

Projects should aim to develop new products, processes or services (or innovative use of existing ones) believed to be significantly ahead of anything similar in the field.

Your proposal can come from any technology and any part of the economy.

Projects must focus on commercialisation, growth or scale up. Priority is given to proposals likely to lead to growth and gains in productivity.

Projects should last up to 5 years, of which up to 3 years can focus on late stage research and development (R&D), and up to 2 more years on establishing a clear route to commercial success. Loan repayments will be required over a further period of up to 5 years.

Businesses must be able to show that they:

  • can cover interest payments
  • will be able to repay the loan on time
  • need public funding.

The competition closes at midday 12pm UK time on the deadline stated.

Funding type


Project size

Loans of between £100,000 and £1 million are available.

Who can apply

State aid

Any UK business claiming funding must be eligible to receive state aid at the time we confirm you will be awarded funding. If you are unsure please take legal advice. For further information see our general guidance.

Your project

Loans of between £100,000 and £1 million are available to fund your project’s eligible costs.

Projects should last up to 5 years and are expected to start by March 2020.

To take on an innovation loan for a project you must:

  • be a UK based micro, small or medium-sized enterprise (SMEs)
  • 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, 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.

Multiple applications

An applicant can only submit one application per competition round. If more than one application per round is submitted, only the first application will be considered for assessment.

Previous applications


You can use a resubmission to apply for this competition. A resubmission is a proposal Innovate UK judges as not materially different from one you have submitted before. It can be updated based on the assessors' feedback.

If you submit a new proposal this time you will be able to use it in no more than one future competition that allows resubmissions.

Failure to exploit

If you applied to a previous competition as the lead or sole organisation and were awarded funding by Innovate UK or UK Research and Innovation, but did not make a substantial effort to exploit that award, we will award no more funding to you, in this or any other competition. You will not be able to contest our decision. We will:

  • assess your efforts in the previous competition against your exploitation plan for that project
  • review the monitoring officers’ reports and any other relevant sources for evidence
  • document our decision, which will be made by 3 team members, and communicate it to you in writing

Previous projects

Under the terms of Innovate UK funding, you are required to submit an independent accountant’s report (IAR) with your final claim. If you or any organisation in your consortium failed to submit an IAR on a previous project, we will not award funding to you in this or any other competition until we have received the documents.


We have allocated up to £10 million to fund innovation projects in this competition through innovation loans to suitable SMEs.

We 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.

More details of our approach, including a summary ‘heads of terms’ document setting out the main terms and conditions of the loans, are included in the guidance for applicants for this competition.

This competition provides state aid funding under article 25, ‘Aid for research and development and innovation’, of the General Block Exemption Regulation (GBER). It is your responsibility to make sure that your organisation is eligible to receive state aid.

You could get a loan of up to 100% of your eligible project costs. Since the loan will have favourable terms (particularly a below-market rate of interest) the value of this benefit over the life of the loan will be the equivalent of a grant and will be a form of state aid. For experimental development projects this grant equivalent, as a proportion of the eligible project costs, can be:

  • up to 45% if you are a micro or small business
  • up to 35% if you are a medium-sized business

We expect that most innovation loans will meet this requirement. The general guidance on innovation loans contains more information to explain the grant equivalent calculation for an innovation loan.

Your proposal

The aim of this competition is to help businesses overcome barriers to the best cutting edge, game changing innovations becoming a successful commercial reality. This includes making a considerable economic impact and/or resulting in significant, sustainable business growth.

Your proposal must demonstrate:

  • a clear game-changing and/or disruptive innovative idea
  • that your idea can lead to innovative products, processes or services that are significantly ahead of others in the field or that it includes prototyping, demonstrating, piloting, testing and validation in environments that represent real life operating conditions
  • a strong and deliverable business plan that addresses (and documents) market potential and needs
  • a team, business arrangement or working structure with the necessary skills and experience to run and complete the project successfully and on time
  • awareness of all the main risks the project will face, with realistic management, mitigation and impact minimisation plans for each
  • sound, practical financial plans and timelines that represent good value for money
  • a clear, evidence based plan to deliver significant economic impact, return on investment (ROI) and growth through commercialisation, as soon as possible after project completion

Loans will also be declined for businesses:

  • we consider unable to afford the interest and repayments on the loan
  • that have not demonstrated that they are unable to obtain finance from other sources on suitable terms
We are looking to fund a portfolio of projects and businesses, across a variety of technologies and markets.

Specific themes

Your proposal must demonstrate:

  • a clear, considerable potential to make a significant and positive impact on the UK economy and/or productivity
  • realistic, significant potential for global markets

We particularly welcome proposals from innovation-based businesses with significant ambition and potential for growth or scale up. We expect you to be able to show a clear route to commercial success for your project.

Research categories

Projects we will not fund

In this competition we are not providing grant funding.

We will not provide funds to “match” the grant funding of any other projects.

8 July 2019
Competition opens
23 July 2019
Brighton briefing event at Brighton Fusebox
24 July 2019
London briefing event at America Square
24 July 2019
Online briefing event
25 July 2019
Sheffield briefing event at Eagle Labs
30 July 2019
Warrington briefing event at Daresbury STFC
31 July 2019
Birmingham briefing event at Innovation Birmingham
11 September 2019 12:00pm
Registration closes
18 September 2019 12:00pm
Competition closes
1 November 2019
Applicants notified
31 March 2020
Latest project start date and drawdowns

Before you start

To apply:

  • register online by clicking the green button above
  • read the innovation loans guidance
  • read the guidance for applicants for this competition
  • read the declaration in the guidance for applicants that you are asked to confirm in your application and sign as part of your loan agreement
  • read the summary heads of terms in the guidance for applicants
  • consider attending one of the briefing events listed in ‘Dates’
  • complete and upload all parts of your online application on our secure server and using the survey link provided

We will not accept late submissions. Your application is confidential.

Entering into a loan agreement with us is a financial commitment. You need to confirm to us that the loan is for business purposes. You are wholly responsible for ensuring that it is the right approach to financing your business, that your business is legally allowed to borrow and you will be able to fulfil the repayment obligations under the loan. You should take expert advice before submitting an application.

By submitting an application, you are providing authority for Innovate UK (and any subsidiary or agency appointed to assess your application) to do checks on the financial standing of your business. This might include, but will not be limited to, checks with credit reference agencies (which might be recorded on your record) to determine your credit standing, identity, beneficial ownership and control, and source of existing funds.

In the application process (and as part of the loan agreement) we will require you, or the person appointed by your company to act for it, to enter into a legally binding declaration. You should take independent advice on the content of this declaration.

An application for an innovation loans competition needs different information from one for a grant application. Even if you have applied for funding from us before, you are strongly advised to read the innovation loans guidance, the specific guidance and the application questions for this competition when completing your application.

What we will ask you

There are 2 parts to applications:

  1. Quality of the project: this will be assessed by independent experts based on your answers to part A of the application and the project finance form.
  2. Suitability of the business to receive a loan: this will be evaluated by our credit team based on your answers to the Early Metrics startup high growth index survey (available as part of the questions in the guidance for applicants) and your historic and forecast financial statements.

You need to be successful in both application parts before an innovation loan will be offered. Final terms of the loan offer will be decided by the Innovate UK Loans Ltd credit committee.

We will evaluate the suitability of your business to receive an offer of a loan for your project. This follows a portfolio approach as detailed in the competition process in the guidance.

Background and further information

This competition is the first of 2 in an extension to the pilot Innovation Loans scheme introduced in autumn 2017 through Innovate UK. Innovation loans will be made through Innovate UK Loans Ltd, a wholly owned subsidiary of Innovate UK.

The Innovation Loans scheme aims to provide finance that is affordable, patient and flexible for later-stage innovation projects that have a clear route to commercial success. They are aimed at innovative micro, small and medium-sized businesses who will be able to manage a loan, but who struggle to access finance from commercial lenders or schemes backed by the British Business Bank.

If you need more information, email us at or call the competition helpline on 0300 321 4357 between 9am and 5:30pm, Monday to Friday.

You should read the UK Research and Innovation privacy notice to understand how we handle your personal data.

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