Innovate UK launches £50m innovation loan pilot scheme

Innovate UK has recently launched a pilot loan competition for innovative SMEs.  The pilot will last over 2 years with £50m being made available. Loans are offered at discounted interest rates, currently 3.7%, which means they are a form of state aid.

What you can use a innovation loan for

You can use a loan to finance a late-stage research and development project categorised as experimental development.

Experimental development includes:

  • producing plans, arrangements and designs for your products, processes or services
  • developing commercially-usable prototypes and pilots
  • experimental production and testing of products, processes and services
  • How an innovation loan works

You will need to successfully apply into one of the Innovate UK loan competitions to obtain an innovation loan. It is a competitive process. You could borrow between £100,000 and £1 million, to cover up to 100% of your eligible project costs. The loan period is up to 10 years. As innovation loans are provided at discounted interest rates they are a form of start aid.  This means that for this innovation project a business won't be able to claim R&D tax credits under the SME scheme.  They will however be able to claim under the Research and Development Expenditure Credit (RDEC) scheme for all eligible project costs.

Who can apply?

To be eligible for an innovation loan you must:

  • be an SME
  • be UK-based
  • be planning a project that fits with the defined scope of the specific loan competition you are applying into
  • apply alone. Only single SMEs may apply
  • Individuals, research organisations and large companies are not eligible. Collaboration with other organisations cannot be funded through a loan.

When to apply

There will be 5 opportunities for businesses to apply for an innovation loan. Up to £10 million will be available in each loan competition.

These pilot loan competitions may be:

  • themed, where your application will need to fit with specific scope criteria
  • open to any type of experimental development innovation project
  • Innovation loan competitions will be spaced out over 2 years and run to the end of 2019.  We will provide more details of each themed loan competition as and when they are announced.


Joshua Odigie BA (Hons)
Author Joshua Odigie BA (Hons) Marketing Executive
Start your Tax Cloud claim now Discover if you qualify and ensure your R&D tax claim is maximised. Get started
Powered by

Myriad Associates helps businesses maximise tax reliefs and secure R&D grant funds. We specialise in R&D Tax Credits, Video Games Tax Relief, Innovate UK grants, Horizons 2020 grants, and Research and Development Capital Allowance Claims.

  • Submitting R&D tax claims since 2001
  • 100% success rate
  • Over £100m claimed and counting
  • Industry leading specialists
  • In-house technical, costing and tax experts
  • Member of the Research and Development Consultative (RDCC) committee

Meet some of the team behind Tax Cloud

Barrie Dowsett ACMA CGMA Chief Executive Officer
David Farbey MA, FISTC, FRSA Senior Technical Consultant
Deborah Chapple ATT Corporate Tax Senior Associate
Lauren Olson MA, MISTC Technical Consultant