Innovation loans – ’round one’ for applicants is open

Featuring Andrew Richards | 16th November, 2017

Following our previous blog post, further details of the Innovate UK loans have been announced and the competition, ‘round one’ is open. There is a briefing event taking place on 16 November which can be joined by webinar, and we will be tuning in…

Innovation loans

As a reminder, innovation loans are aimed at businesses involved in late stage R&D projects where they cannot get finance, but can bring a commercial product to market:

  • They are for late-stage research and development (R&D) projects only. A late-stage R&D project is one which builds on a new idea but has not yet reached the point of commercialisation.
  • Interest will be charged at the rate of 3.7% per annum on outstanding amounts, payable quarterly in arrears. Note, State Aid rules apply as the rate offered is under market value.
  • The ‘availability period’ (for up to 3 years) is 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.
  • The ‘extension period’ (for up to 2 years) is when the project is focused on developing the commercialisation of the product. You will not be able to make further drawdowns during this period.
  • 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.
  • Typical security for a transaction of this nature may include, but is not limited to:
    • A debenture over the borrower’s assets (including, and without limitation, a fixed charge over key assets and a floating charge over all other assets of the borrower)legal charge over intellectual property and specific assets financed under the loan agreement. PGs are not required.
    • A legal charge over intellectual property and specific assets financed under the loan agreement. PGs are not required.
  • Any applicant must be an SME, UK-based and the project must fit within the defined scope of the specific loan competition you are applying into. Joint applications are not permitted.

Key Dates for ‘round one’:

  • 8 November 2017 – Competition opens
  • 16 November 2017 – Briefing event for applicants in London or by webcast
  • 10 January 2018 12:00pm – Registration closes
  • 17 January 2018 12:00pm – Competition closes
  • 3 April 2018 – Earliest project start date and start of drawdowns
  • 27 April 2018 – Applicants notified

There are 4 specific themes for this innovation loan competition:

  1. Smart infrastructure
  2. Urban living
  3. Energy supply and systems
  4. Connected transport

Innovation loans will not be offered to:

  • Businesses they consider unable to afford the interest and repayments on the loan.
  • Businesses that have not demonstrated that they are unable to obtain finance from other sources on suitable terms.
  • Innovations that are deemed too early for an innovation loan and require significant early stage R&D.
  • Incremental innovations unlikely to significantly improve UK economic and SME growth.
  • Connected transport innovations that can only be applied to propulsion and onboard systems in a single mode of transport (for example, only automotive, rail, air, or marine vehicles or vessels).
  • Connected transport proposals for new physical infrastructure, unless they encourage change across complex transport systems.
  • Fossil fuels, including exploration, appraisal, production, processing and transport.

Further details, including application guidance, can be found on the following links:

Innovation Loans – What they are and how to apply

Competition Guidance for Innovation Loans Infrastructure Systems

Apply for Innovation Funding

Get in Touch

How would you like to be contacted?

GDPR Consent

For more information read our privacy policy and terms and conditions.

More like this

Looking for more?
Insights
Get Regular Insights
Sign Up