Small businesses with ground-breaking ideas will be able to access new innovation loans from government-funded body Innovate UK.
The first competition for the government-backed loans will allow businesses to access between £100,000 and £1 million on flexible, affordable terms.
Loans will be priced at the HM Treasury discount rate - currently 3.7% fixed. The loan will allow for up to three years to finalise the development of the product or service, a further two years to commercialise and, finally, up to five years to repay.
This is the first time Innovate UK has offered a new funding mechanism other than matched grants.
Innovation loans will offer affordable, flexible funding for later-stage research and development projects with a clear route to commercial success.
The organisation’s chief executive, Dr Ruth McKernan CBE, said: “We know that many businesses with ground-breaking ideas struggle to get them to market.
“Our new innovation loans will help businesses scale up, and give them a clear route from prototype to making new products and services available to customers.”
The first competition supports smart infrastructure, urban living, connected transport projects and energy supply. The first wave will make up to £50 million available over two years.
Innovate UK has done extensive research to understand the needs of scale-ups and believes the loans will be especially helpful to those companies.
Its findings are available here: ‘Scaling up: the investor perspective’.
