Getting the most out of your innovations has always been the key focus of RIFT R&D. It can be a rough road bringing your best ideas to life, and a lot hangs on getting the right financing at the right moment. This is where R&D Grant Funding enters the picture. It's a powerful way of boosting innovative companies, and could be the key to launching and growing the UK's brightest businesses.
It its core, R&D Grant Funding is a government scheme designed to support the development of competitive new products, processes and services. A standard project using the scheme might typically run between 6 months and 3 years, with grants funding up to 70% of the costs involved. R&D always involves an element of risk, but a cash boost at a critical time can do a lot to make the work you're doing safer and more effective. Grant Funding avoids some of the major pitfalls of other financing options as well, like giving up equity in your business.
The funding comes from both British and European sources. The UK's innovation agency, appropriately named “Innovate UK”, is sponsored by the Department for Business, Energy and Industrial Strategy. So far, it's pumped £2.2 billion into promoting innovation since 2007, with over 7,600 organisations feeling the benefit. Its core budget for the 2017/18 tax year alone is over £500 million. Looking ahead, the government's numbers are equally impressive:
£23 billion has been committed toward boosting innovation and infrastructure over the next 5 years.
£2 billion per year will go toward R&D funding by 2020.
£400 million is being pumped into venture capital funds through the British Business Bank, unlocking £1 billion in finance.
Innovate UK's activities tend to centre around 4 main sectors, broadly comprising emergent technologies, health/life sciences, infrastructure systems and manufacturing/materials. These are just general statements of priority, though, not specific limitations on eligibility. Their support has 2 basic “streams” to it, one to help fund feasibility studies and another for experimental development projects. The help you can get depends on the size of your business and what you're doing:
Feasibility studies can get up to 70% of eligible costs back for small businesses, or 60% for medium-sized firms.
Experimental development can net small businesses up to 45% of project costs. Medium-sized ones can get 35%.
Moving on to Europe, Horizon 2020 is dedicated to supporting R&D through €80 billion in grants until 2020. It's not limited to SMEs, so businesses of any size can be eligible for funding. Right now, it doesn't look like the UK's departure from the European Union is going to be an obstacle to British companies, either. In fact, non-EU states like Norway, Switzerland and Turkey are already involved in the Horizon 2020 project.
Like Innovate UK, Horizon 2020's grants are divided into 2 streams, one for feasibility (risk assessment, market studies and so on) and the other for innovation development (prototyping, performance verification, etc.). Here's what you can get for each kind of project:
Feasibility assessment: €50,000 per qualifying project.
Innovation development: typically €500,000 - €2.5 million+, up to 70% of costs in most cases. Certain exceptional projects could even get up to 100%.
Another European Grant Funding option for SMEs comes from Eureka Eurostars. For UK businesses, you can only qualify for this if you're doing research. They're interested in supporting international collaborative R&D projects, with up to 60% of your eligible costs funded up to €360,000 per UK partner.
How you access the R&D Grant Funding that's out there can vary. Some are open for applications all year round, while others have deadlines to hit. Actually getting your application in can be complicated, with a fair amount of information needed to support it. You might have to explain the business opportunity you've identified, analyse the risks you'll be facing and so on. The work and time involved alone might be enough to have you questioning whether it's worth the effort. However, putting the time and thought in will set you up in a much better position with a much stronger bid.
RIFT is always keen to support small business innovators, helping them get the finding and tax relief their work deserves. We'll be at this year's Business Funding Show on the 22nd of February, flying the flag for R&D Tax Credits and the range of things we do to make your innovations a success. The event's being held at East Wintergarden, Canary Wharf, London, and tickets are available now at: https://www.eventbrite.co.uk/e/the-business-funding-show-2018-tickets-35167298336.
In the meantime, feel free to get in touch with all your R&D Tax Relief or financing questions. If you're a business problem-solver, we'll make sure you get the credit you deserve.
As always, we had an amazing time at the KEiBA award show this year. Kent is a terrific place to build a business, and it's always inspiring to see so many innovative firms making their marks. There's...