We have allocated up to £10 million to make loans to suitable SMEs to fund innovation projects in this competition.
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. We may consider larger loans on an exceptional basis, but you must contact us before making an application.
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 on anything you borrow.
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.
3. Repayable over a maximum of 5 years (the ‘repayment period’) after the availability and extension periods. You will have to repay on a regular quarterly schedule and you will pay interest on the outstanding amount of the loan.
These are the longest periods we will consider. Your application should propose the most suitable timings for your project and business. We will consider the suitability of the timings in any loan offer that we make to you.
Interest will be charged at the rate of 3.7% per annum on outstanding amounts, payable quarterly in arrears.
We expect to take security where it is available, for example 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.