Looking at grants in the innovation sector
In the UK, the pursuit of innovation has led to countless breakthroughs in various fields, from science and technology to healthcare and the arts. At the heart of this innovation lies grant funding, a crucial mechanism that supports and fuels creative ideas, research projects and entrepreneurial ventures. In this article, we will explore the landscape of non-dilutive funding in the Research & Development (R&D) innovation sector – and to get a good idea of the process, we spoke to Sara Palmer, the Partnerships Manager at the Exeter branch of Granted Consultancy.
Q: To begin, what exactly does Granted Consultancy do?
A: Granted Consultancy is a non-dilutive funding agency. We specialise in non-equity, non-table funding. We’re talking government incentives, grants, tax credits, and other incentives that are there from the government, or occasionally philanthropic corporate funds – generally, though, they’re government incentives to encourage companies to carry out R&D in really high-risk innovation projects.
Q: With loans and grants, does one type of funding have a clear advantage?
A: If you think about debt and equity options, apart from startup loan options, they generally don’t kick in until a company has at least £250k annual recurring, and it’s secure – so that’s when debt options properly open out. So, the whole point of these government incentives is to make sure companies are able to take their ideas to market; it’s their way of plugging that gap.
Q: Do some companies take on a combination of grants and loans?
A: Yes, generally, they have to. So, we would see on a typical funding journey, about proof of concept. Unless they are able to get a feasibility grant, it would be friends and family / bootstrapping to get to proof of concept, then they would hopefully be using non-dilutive funding to get them to the point where they can unlock equity debt. Also, most grants are not given at 100 per cent intervention level. What I mean by that is intervention rate is how much of the project the government will fund. On average, a grant will cover 70 per cent, so if you’re getting a grant, you’re expecting to match-fund the other 30 per cent which could come from debts or equity – but they have to go hand in hand.
Q: Is there normally a set of eligibility criteria that businesses have to meet in order to qualify for a grant?
A: Usually, all the R&D have to be UK-based. You can sub-contract by up to 30 per cent – but, generally, they have to be in the UK. There are some that allow you to outsource to other countries, but each grant will specify what you can and can’t do; they’re all individual.
Q: How does non-dilutive funding contribute to a company’s growth & innovation strategy?
A: You need to prove that without a grant, you can’t move forward, i.e it’s pivotal to taking it to the next level. Plus, there might be the idea that they may be able to get the funding from somewhere else but it will take a lot longer, and if they don’t take that innovation opportunity now, somebody else is going to – so, in that sense, it does accelerate innovation. Also, it gives a company credibility because the whole process is very competitive.
Q: Have you seen an increase in innovative projects?
A: Absolutely, the government has committed to that, we are seeing more funds, there’s more diversity with the funds – and there’s more knowledge about grant funding in the UK.
Q: What advice would you give to someone who’s thinking about applying for a grant?
A: First, it’s really important to understand non-dilutive funding. We do a lot of webinars and cover what grants are available and how it ties in with other funding, and the development of what you’re looking to do. Also, the application process is really lengthy – each one is like a dissertation, at least a 4,000-word document; with appendices. We would take 4-6 weeks on an application, therefore you have to develop a project that’s grant-ready, you need to then build the application, And then, once you submit the application, it’s going to take a while before you hear back on whether it’s been successful. So, timing is the main thing to consider. Realistically, 6-12 months for it to be progressing.
If you’d like to know more about Granted Consultancy, and how they might be able to help you, head over to their website – https://grantedltd.co.uk/.
To read about the UK Research and Innovation (UKRI) organisation, check out our article Investing in the Future.
For general business finance advice and support, check out the HotSW Growth Hub – covering all sectors in the Somerset and Devon region. https://www.heartofswgrowthhub.co.uk/.
Are you looking at funding for a new innovation-based company? Let us know where you’re at via comments!