R&D grants: where the heck do I start? - 3

Updated: Nov 9, 2018

In the second part of ‘where the heck do I start?’, I focused on the grant aimed at funding a project and bringing it to market. In this third part, I will present the business side.

3- How do I fund my business?

Once again, the grants that will be available to you will depend on the stage of development of your company. In the first part, I defined three ages: 0 to 12 months, 12 to 24 months, over 24 months.

If you own a first age company (0 - 12 months)

National funds

Companies can call on the British Business Bank at an early stage of development.

Actually, the bank has an instrument tailored for companies in their infancy: the Start-Up loans. They are personal loans backed by the government. In this scheme, an individual can borrow from £500 to £25.000 for one to five years, with an interest rate of 6% p.a. This money can then be used for anything but debt repayment, training qualification and education programmes or investment opportunities.

What's more, the Start-Up Loan Company offers free application support and free post-loan support and mentoring.

Regional funds

Local Enterprise Partnerships (LEPs)  have been set up throughout England to support economic growth in a given area.

In the North, businesses can for example call on the Leeds city region Enterprise Partnership or the York, North Yorkshire and East Riding Enterprise Partnership.

The former can support first age businesses through Ad:venture, a programme funded by the European Regional Development Fund. Their Start-Up loans are available between £1000 and £2500 to cover the start-up costs, excluding running costs and working capital. It can so cover up to 50% of the eligible costs.

The latter has set up Sparkfund, a programme which offers to match up the company’s investment up to £20.000.

If you own a second age company (12-24 months)

National funds

The British Business Bank invests in 80 equity funds supporting UK businesses. Companies can get in touch with one of these funds to get help to meet their needs; indeed, some funds only offer finance to acquire or replace equipment, for example. On the other hand, some funds are reserved to specific locations.

Regional funds

Leeds city region LEP

Provided the investment will create new jobs in the Leeds City Region, companies can apply for:

  • grants: the LEP will top up £1 for every £4 of private investment. To benefit from these grants, the projects must be worth at least £50.000. Moreover, they must cover key growth sectors, namely life sciences and related industries, digital and creative industries, low carbon and environmental industries, manufacturing and financial and business services.

  • loans: the LEP is ready to lend £1 for every £3 lent by a private institution, repayable within 5 years

What’s more, Ad:venture can allocate £2.500 to £25.000 to business aged between 12 and 36 months for capital investment. Do note that the companies are expected to contribute 50% of eligible costs.

York, North Yorkshire & East Riding  LEP

Sparkfund can participate in a company's R&D by investing pound for pound with it, up to £ 50.000.

If you own a third age company (24 months+)

National funds

The British Business Bank can facilitate business finance through its Enterprise Finance Guarantee and its Enterprise Capital Funds. Both programmes aim at facilitating the small companies access to private equity by derisking the private investment.

Regional funds

The same grants and loans are available for the third age as for the second.

R&D tax relief

This isn’t a grant per se, but limited companies which can prove they invest in R&D can claim a tax relief.

R&D is defined by HMRC as:

  • employing a competent professional

  • seeking an advance in a given field

  • facing scientific or technological uncertainty

The relief depends on the size of the company: SMEs (<500 employees) can claim a 25% relief on their corporate tax if they are profitable, or a 33.35% cash back if they make losses. As for larger companies, they can claim a 9% relief.

These reliefs can be obtained for the current and the two previous years.

Contact us!

© 2020 - DRIAD

Driad is registered in England and Wales as a Limited Company, No 9086760

  • Facebook Social Icône
  • Twitter Icône sociale
  • LinkedIn Social Icône