We know that Research & Development (R&D) and innovation activities are essential for businesses that are looking to compete, grow and succeed and that companies invest in R&D and innovation during the good economic times.
Why is investment in R&D and innovation reduced or even cut totally in more challenging times?
Numerous studies have shown that these activities are just as important in the difficult times, like those that we are facing with the current Covid-19 pandemic.
Studies show that when investment in R&D is cut in a recession it can take years – even decades- to return to previous levels.
Although the need to reduce costs is understandable in current times, investment in R&D and innovation can be the best route to survival and growth.
Access to debt and equity funding comes up regularly as a barrier to continuing with R&D and innovation. This is where Innovate UK can help.
With £210m in loans available under the Government’s coronavirus support package, Innovate UK want to support businesses to continue to invest in their R&D and innovation activity.
The support package offers for businesses not only helps to set them up for growth, but also has a positive impact on the economy as a whole and encourages economic growth.
To facilitate this, we have broadened our eligibility criteria so that innovation continuity loans are available not only to Innovate UK award holders who have a challenge in continuing with their live project.
Or who want to start a follow on project, but also open to businesses who are continuing, completing or following on from innovation activity that has not been supported by an Innovate UK award in the last 36 months.
We appreciate that leaders battle to maintain liquidity and have to balance the need to manage costs with the risk of losing technological advantages due to decreased funding availability. We hope that our flexible innovation continuity loan funding is a useful option to consider.
How Innovation Loans work
Loans of between £250k and £1.6m are available, to cover eligible R&D and innovation project costs that are unfunded as well as reasonable additional R&D costs caused by the pandemic.
The innovation continuity loans have flexible and patient terms, are repayable over 7 years and have an interest rate of 7.4% that is partially deferred to make them more affordable during the R&D and pre-commercial project periods when cash is tight.
What are we looking for in an application?
We are looking to support SMEs that are continuing their innovation activities through a strong R&D project, that are facing challenges in doing so as a result of the Covid-19 pandemic and that are suitable to take on a long term loan commitment.
The business needs to demonstrate that they have a really good idea, that there's a really good market, that they can deliver a continuity project despite the pandemic, that they need public sector funding support and that they will be able to afford to pay the interest and repay the loan.
Our application has two parts: a project proposal that is assessed by experts and an organisation and business financial survey that is evaluated by our credit team. Our credit committee will decide on loans to suitable businesses with high quality businesses.
You can find out more about how to apply and our approach to making decisions at our webinar on 9th December 2020 – and you must submit your application by 13th January 2021.
Studies have shown that maintaining or increasing investments in R&D and innovation during times of crisis is the best path to survival and growth – both for businesses and the overall economy – and that maintaining a culture of innovation can ensure success in the medium and longer term.
- Innovation Continuity Loans – Landing Page - https://ukri.innovateuk.org/ICL
- Innovation Continuity Loans Strand 1 Ongoing Competition - https://earlymetrics.fra1.qualtrics.com/jfe/form/SV_8Ag4hfhZTndA2Et
- Innovation Continuity Loans Strand 2 Competition November 2020 https://apply-for-innovation-funding.service.gov.uk/competition/779/overview
- Innovation Continuity Loans Strand 3 Competition November 2020 - https://apply-for-innovation-funding.service.gov.uk/competition/700/overview#summary
- Innovation Loans: General Guidance for Applicants -https://www.gov.uk/guidance/innovation-loans-general-guidance-for-applicants
- Innovation Loans - What they are and how to apply - https://www.gov.uk/guidance/innovation-loans-what-they-are-and-how-to-apply
You can go to the Innovate UK website