As first mentioned in the 2015 spending review, it would appear that ‘innovation loans’ are soon to be offered through Innovate UK.
Innovate UK are currently on a tour of the UK, “to launch a UK pilot programme of Innovation Loans this autumn”. I anticipate that we may have further information shortly as we have the South West Regional Manager of Innovate UK visiting our Truro office.
For now, the information I have gleaned is as follows:
- Innovate UK is to offer low-interest loans of up to £1 million to SMEs
- Innovation loans will, “offer affordable, patient, flexible funding for later-stage research & development projects with a clear route to commercial success”
- Loans will be offered, through future competitions (to be announced), to growth-oriented SMEs that are able to demonstrate that they have a high quality innovation project, that they will be able to afford the interest payments and subsequent repayments associated with a loan, and that they need public sector support as they are unable to access finance for their project on standard commercial terms
- The £50 million pilot project will initially provide loans to companies in the health and life science and infrastructure sectors
- The innovation loans, which will range from £100,000 to £1 million, will be fixed at an interest rate of 3.7 per cent for three years
- Businesses will be given five years to pay the money back and no interest will be due until the product being developed has started to be commercialised
- There are no arrangement fees and borrowers will not be expected to put up their houses as collateral.
As I said at the beginning of this blog, I anticipate being able to add some more detail shortly.