by James Hickson | January 12, 2022 | 8 min read
Is your business eligible for innovation grants? The full guideGet funded
Last updated: April 19, 2022
Have you considered if your project might be eligible for funding from innovation grants? If you’re working on an innovative idea then you should consider if you might be eligible for grant funds from a body like Innovate UK.
Innovation projects are recognised as being key to powering successful modern economies, yet getting ideas off the ground can be challenging especially when it comes to securing sufficient funding.
In this article, we will take a look at how to check if your business or new idea would be eligible for funding and the best way to go about applying.
Table of contents
- Is my business eligible for innovation grant funding?
- Getting funding for innovation projects
- What all winning applications have in common
What are innovation grants?
Innovation can be loosely defined as the practical implementation of ideas to develop new products, services or processes – similar yet different from invention. Innovation grants are most often provided through the government for specific projects identified as being innovative and of benefit to society.
Funding for innovative ideas can be awarded to several forms of business entities such as partnerships, or to a UK academic institution. These grants are used to fund the development of a range of innovative ideas spanning research and development (R&D) in tech or biomedical sciences to product prototyping and early-stage market entry.
What’s the purpose of innovation grant funding?
Grants for innovation are used to help encourage new ideas that positively influence society and people's lives. Projects in this area may struggle to secure finance from other sources such as venture capital because the nature of innovation is that it’s often untested and therefore may be seen as being too risky from an investment perspective. This is where a grant award can help push a potentially transformative project into the development or launch stage.
What projects does Innovate UK fund?
Innovate UK is the innovation agency for the United Kingdom. The agency helps businesses develop and launch new products and services with money and other support.
There are two main categories of acceptable projects that can receive funding from the agency. They’re projects that either:
Develop a new product, service, or process
Extend existing technology or services significantly to render them an improvement on that of competitors
Some of the sectors of the economy that are a focus for grant funding include net zero, health and wellbeing, tech, the arts, and design and media. This is not an exhaustive list and your project may successfully get funded if it falls outside of these categories but meets all the other criteria of eligibility.
What is an Innovate UK Smart Grant?
According to their website, the Smart Grant is Innovative UK’s biggest open competition for money designed to support “the best game-changing and commercially viable innovative or disruptive ideas”. These grants target projects that can “provide evidence for considerable potential to gain market share, generate economic impact and exports.”
Your idea can get funding at various stages of maturity whether you’re still studying feasibility or ready to build your prototype. Applications are made through a competitive process. There are normally up to four Smart Grant competitions per year where you can be awarded a share of the £25 million available.
According to Innovate UK, to apply your project must be either:
an idea for a completely new product, service or process
a brand-new use for an existing product, service or process that takes it above and beyond what’s in the current market
Funding is available for projects in almost any industry and could involve, for example, developing innovative solutions from UK research into anything from a net zero energy system to game-changing data solutions and more.
There are four main project categories that may be awarded Smart Grant funding:
Fundamental research: experimental or theoretical research that may not have any immediate direct application or use case.
Feasibility studies: analysis and evaluation of a project’s viability
Industrial research: focused on development of products, processes or services
Experimental development: leveraging existing knowledge and skills to develop improved products, processes or services
Is my business eligible for innovation grant funding?
The first question to ask yourself should be – is my project actually ‘innovative? Of course, many products or services can be classed as innovative without being based on introducing an unheard-of product or service – for example, by adding a new take to something which already exists and significantly improving it.
Innovate UK offers several funding opportunities, each has its own set of eligibility criteria and scope.
Here are a few tips on things to consider before you start an application:
Read the full eligibility, scope, and guidance of the specific fund opportunity that you want to apply for
Any previous projects that you applied for funding for should be fully completed
Your performance with projects from previous funding competitions will be assessed and used to determine future eligibility
Your application must be professional, genuine and honest if you want it to be sent for assessment
Getting funding for innovation projects
Now let’s take a look at the process that you will need to follow to fund innovation projects you are involved in.
How do I get funding for innovative ideas?
There are several types of potential funding that you can look to apply for to help you with the costs of developing your project. Innovate UK detail four specific grant types:
Innovation loans – for small and medium-sized UK enterprises
Knowledge Transfer Partnerships – funded partnerships with academics and researchers
Smart Grants – support to carry out ambitious, disruptive R&D projects
Horizon Europe – EU funding programme for research and innovation
How do I apply for innovation funding in the UK?
Applying for a grant can be both time-consuming and resource-intensive. Some people enlist the help of a specialist grant application agency where you can get assistance with every stage of the application from identifying the right fund to apply for to writing the final application.
The first step on your journey is to make yourself fully aware of the specific requirements of the fund that you’re applying for. Check out the general guidance on applying for an innovation grant in the UK
There are generally two types of application process to follow::
An online application process through the Innovation Funding Service
A document-based file transfer protocol (FTP) application process
How much money can I claim as innovation funding?
Different sizes of grants are available depending on the size of the business applying and the stage the project is in.
Although each grant programme has different funding levels and requirements, five main factors determine how much you might get:
Scope of the competition
Type of work
If the project is collaborative
Duration and requirements of the project
If you apply for funds from a Smart Grant, for instance, you can be awarded a share of up to £25 million at the following levels:
Up to £500k for projects of 6-18 months
Up to £2m, for projects of 19-36 months*
*these must be collaborative projects
The UK Smart Grant application process
If you want to apply for a Smart Grant you will need to apply via an Innovate UK competition. You do this by registering and submitting an application using the Innovation Funding Service and searching for ‘Smart’ funding.
You will need to describe the problem or challenge your idea will tackle and how it goes beyond solutions from existing market competitors and what is considered to be current state-of-the-art. The application must also demonstrate the commercial viability of the project and why a grant is necessary to move it forward.
There are three main areas to the application:
If your application meets the eligibility criteria it will be moved on to assessment from independent assessors who will give it a score and provide feedback. The applications with the highest ranking will be recommended for being awarded money.
What are the Smart Grant eligibility criteria?
There are specific scope and requirements to check before you decide to invest the significant time and resources needed to submit a strong application for a Smart Grant competition.
Some of the key requirements include the following:
The lead applicant must be a UK-registered business of any size or a research and technology organisation
The project may be a collaboration with other businesses, academic institutions or research and technology organisations, among others
All projects must include at least one SME
All activity should take place in the UK (including subcontracted work)
You will need to check on the most recent competition scope and requirements information from the Innovation Funding Service for the latest on eligibility criteria for Smart Grants.
What all winning applications have in common
Your application stands the best chance of success if you can communicate how your project offers real innovation, has a well researched business model and will be marketable when launched.
Assessors are looking for a strong project team who have left no stone unturned when it comes to identifying where their project will impact the current market and offer value.
Have you been unsuccessful with a previous application for an innovation grant or does your business not meet all of the eligibility criteria? That needn't stop you from moving ahead with your idea, you can speak to us about a great alternative way of funding your business without sacrificing any control.
James Hickson is the CEO and Founder of Bloom Financial Group, the winner of numerous industry awards – most recently recognized as FinTech CEO of the year as well as Payment Service of the year by AI Global Media.
Bloom is a European Fintech company focused on small to medium business lending. With their proprietary technology, Bloom offers e-commerce and retail brands access to revenue based funding (between 25,000 EUR and 3M EUR).