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 26 July 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Innovation finance

Finance to assist a business to develop and exploit new ideas

Purpose

To stimulate productivity, environmental sustainability and economic competitiveness through increased UK innovation (i.e. exploitation of 'new' ideas) within businesses; and to encourage businesses to innovate and realise the benefits of innovation for the business, and more widely for the economy and the environment.

How will this be achieved?

By providing financial assistance to increase businesses ability to engage in a range of early-stage research and development (R&D) activities in potentially important fields, but where there are significant risks and uncertainties around the expected results and ability to secure commercial benefits.

Why offer public sector support?

Government funding can act to extend the UK’s portfolio of research or development projects by supporting firms directly with promising lines of development, which have fallen at the risk aversion or due diligence hurdles in private capital markets, and where the problem is not rectified by the debt and risk finance interventions. That is, the state takes on a limited risk pooling function to increase the share of national resources devoted to innovation progress, but distributed across a wide range of relatively small firms, increasing the spread of opportunities "sampled".

What will be offered?

Grants / loans will be available for single UK-based businesses (mainly SMEs) who are unable to bear the full cost and to secure sufficient finance to develop technology based product, process, or service innovations. Grants / loans will assist with the cost of:

  • research and development by the business, including obtaining intellectual property rights, 'proof of concept', market research, and capital expenditure linked to prototyping and large scale demonstrators;
  • using third parties, such as consultants, patent agents to undertake the above activities;
  • demonstration projects involving the early adoption of new technologies with a potentially significant environmental benefit, such as to promote low-carbon energy technologies and the better use of energy.

Who will be eligible?

Grants / loans would be given to UK-based pre start, start ups and SMEs engaging in Research and development projects in technologies or applications of national or regional importance.

Although grants / loans are available mainly to SMEs, larger companies with environmental demonstration projects are also eligible. Assistance will be provided as a grant / loan to reduce administration costs and allow businesses to pursue projects that have the most benefit to the economy and the environment.

 

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