UK registered businesses can apply for loans for close to market innovative projects with strong commercial potential. They must significantly improve the UK economy and drive societal benefit.
Competition opens: Thursday 10 July 2025
Competition closes: Wednesday 27 August 2025 11:00am
Innovate UK, part of UK Research and Innovation is offering loans to micro, small and medium sized enterprises (SME). Innovate UK innovation loans are for highly innovative late-stage research and development (R&D) projects with the best potential for the future. There must be a clear route to commercialisation and economic impact.
Note: read all the instructions carefully as changes have been introduced to the Innovation Loans programme. This is to give businesses more flexibility to deliver both R&D and pre-commercial activities as well as increasing the maximum amount of the innovation loan and these are described further down in this section.
Your project must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.
Your project must focus on one or more of the future economy areas included in the Innovate UK plan for action.
You must be able to show that you:
The funding available will be allocated across a series of competitions with the next round opening on the day the previous round closes:
In applying to this competition, you are entering into a competitive process. This competition has a funding limit, so we may not be able to fund all the proposed projects. It may be the case that your project scores highly but we are still unable to fund it.
This competition closes at 11am UK time on the deadline stated in this Innovate UK competition brief. We cannot guarantee other government or third party sites will always show the correct competition information.
Loan
Loans can be between £100,000 and £5 million.
We welcome and encourage applications from people of all backgrounds and are committed to making our application process accessible to everyone. This includes making reasonable adjustments, for people who have a disability or a long-term condition and face barriers applying to us.
You can contact us at any time to ask for guidance.
We recommend you contact us at least 15 working days before this competition’s closing date to allow us to put the most suitable support in place. The support we can provide may be limited if you contact us close to the competition deadline.
You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).
Your project
You can apply for a loan of between £100,000 and £5 million to fund your project.
Projects can last up to five years, including both the R&D and pre-commercialisation phases. Projects are expected to start by 1 January 2026. Your exact project start date and first innovation loan drawdown will depend on the timing of the final credit committee decision and completion of loan documentation.
Note: Businesses subject to State Aid Regulations under the Windsor Framework, including those registered in Northern Ireland, are eligible for different funding. Details are provided later in this section.
To receive an innovation loan for a new project you must:
We will evaluate whether your business is suitable to receive an offer of a loan for your project.
Individuals, large companies, not for profits, charities, academic institutions, and research organisations are not eligible for innovation loans.
Only single businesses can receive loans, so collaboration with other organisations cannot be funded in this competition.
This competition allows you to include a pre-commercial work package within your project. This will allow you to include some of the new eligible costs that will help you to take your project innovation to market and are over and above typical R&D costs.
New eligible costs that can be included in the pre-commercialisation work package include labour, market testing, real world validation, initial tooling or production scale up, capital usage, and up to 20% working capital where it supports commercialisation. Loans can cover up to 100% of eligible project costs.
Note: businesses subject to State Aid Regulations under the Windsor Framework, which includes companies registered in Northern Ireland, will not be able to claim all of the new costs outlined.
You must check the Windsor Framework to check if these rules apply to your organisation. If it does, you will be restricted to the capital usage and material costs for the pre-commercialisation work package.
Eligible Project Costs
Businesses subject to UK Subsidy Control Framework: Businesses subject to State Aid Regulations under the Windsor Framework, including those registered in Northern Ireland.
All UK businesses will be able to apply for a loan of up to £5 million.
Eligible costs will include those in GBER Article 25, in addition to:
Businesses subject to State Aid Regulations under the Windsor Framework: including those registered in Northern Ireland.
All UK businesses will be able to apply for a loan of up to £5 million.
Eligible costs will remain within the current framework of those in GBER Article 25, in addition to:
A full summary of the costs that can be included is provided in Costs guidance for non-academic organisations. The new costs that can be included in the pre-commercialisation work package can be found here Project Finance Guide.
Labour costs: For staff involved in commercialisation activities to exploit the results of the R&D. The salaries, wages, and related employment expenses for employees who are doing work to prepare for selling, working on activities:
Capital usage: This refers to the finance required for any capital assets needed to move from R&D into commercial delivery, such as:
This includes physical assets used during or beyond the project period to help turn R&D results into a commercial product or service. It may apply particularly where such assets cannot be financed through commercial funders. It may also include cases where adaptations are required to deliver innovation that could affect the future value of the asset.
Tooling and materials: Including related costs for activities that support progression from R&D to commercial deployment.
This includes:
An element of working capital: This could be funds needed to cover day to day costs such as:
This must not exceed 20% of the total loan amount or the commercialisation work package.
You are responsible for entering your own project costs in the application and demonstrating the costs are justified and value for money.
It is your responsibility to ensure compliance with subsidy control rules. Full details are provided in the Guidance for Applicants and Project Finance Guide.
You must only include eligible project costs in your application. For specific guidance, see the eligibility section in this competition.
More information on the different types of organisation can be found in our Funding rules.
Subcontractors
Subcontractors are allowed in this competition.
Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.
You can use subcontractors from overseas but must make the case in your application as to why you cannot use subcontractors from the UK.
You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.
All subcontractor costs must be justified and appropriate to the total project costs.
Number of applications
Your business can only submit one application per round of this competition. If you submit more than one application, only the first application will be considered for assessment.
You cannot submit an application in this competition at the same time as submitting an application in any other innovation loans or DASA defence innovation loans competition.
Sanctions
This competition will not fund you, or provide any financial benefit to any individual or entities directly or indirectly involved with you, which would expose Innovate UK or any direct or indirect beneficiary of funding from Innovate UK to UK Sanctions. For example, through any procurement, commercial, business development or supply chain activity with any entity as lead, partner or subcontractor related to these countries, administrations and terrorist groups.
Use of animals in research and innovation
Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.
Applicants must ensure that all of the proposed work within projects, both that in the UK and internationally, will comply with the UKRI guidance on the use of animals in research and innovation.
Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.
You can use a previously submitted application to apply for this competition.
If you have previously submitted an application that reached our assessment stage, you can re-apply once more with the same proposal.
If there are minor differences to the proposal, but it is judged by us to be ‘not materially different’, the same rule applies.
We will not award you funding if you have:
Innovate UK may withhold an award payment at any time if you have any outstanding sums due to us in relation to other projects.
This competition provides funding in line with the Subsidy Control Act 2022. Further information about the Subsidy requirements can be found within the Subsidy Control Act 2022 (legislation.gov.uk).
Innovate UK is unable to award organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.
EU State aid rules now only apply in limited circumstances. Please see the Windsor Framework to check if these rules apply to your organisation.
In the ‘Project details’ section of your application you will be asked questions to indicate if State Aid or Subsidy applies to your organisation.
Further Information
If you are unsure about your obligations under the Subsidy Control Act 2022 or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.
You must always make sure that the funding awarded to you is compliant with all current Subsidy Control legislation applicable in the United Kingdom.
This aims to regulate any advantage granted by a public sector body which threatens to or distorts competition in the United Kingdom or any other country or countries.
This award is classified as a Subsidy which does not form part of your Minimal Financial Assistance or De Minimis allowance.
Up to £25 million has been allocated to fund innovation projects across the current rounds of this competition.
Innovate UK will offer loans of between £100,000 and £5 million, based on your project proposal and our judgement of the suitability and affordability of a loan for your business. The Innovate UK Loans Ltd credit committee will decide the final terms, amount and length of the loan offer.
Innovation loans consist of two distinct phases: a project period of up to five years, and a repayment period of up to five years. The total loan term must not exceed seven years, so you must structure the duration of each phase accordingly. You must ensure there is sufficient time after the R&D and pre-commercialisation phases to reach the initial stage of full commercial exploitation.
The project period starts from the first loan drawdown and continues until the point of first commercial exploitation. This period typically includes the R&D activities (which should be completed within the first three years) and may also include a pre-commercialisation work package. You must allow time after the R&D and pre-commercialisation to begin full commercial exploitation.
Loan drawdowns are quarterly during the project period. Interest will be charged at 3.7% per annum on the drawn amounts. An additional 3.7% per annum in deferred interest will also accrue on the principal but will not be payable until the repayment period begins.
The repayment period begins immediately after the project period ends and can last for up to five years. During this time, you will be required to repay the full loan amount, including any deferred interest, on a quarterly basis. Interest will be charged at 7.4% per annum on the outstanding loan balance.
The overall term of the loan must not exceed seven years and you must structure the duration of the project period and the repayment periods accordingly. You must ensure you leave enough time from completion of the project and any pre-commercialisation activities to get to your first commercial sale.
These periods must be based on the needs of your business. We will consider the suitability of your proposed timings in any loan offer that we make to you.
By way of an example, if the project requires three years of research and development and pre-commercialisation activity to get to market, then the maximum time available for the loan repayment would be four years.
We expect to take security in the form of a debenture. We will not require personal guarantees.
More details of our approach, including a summary ‘heads of terms’ document setting out the main terms and conditions of the loan, is in the terms and conditions for this competition.
You can get a loan of up to 100% of your eligible project costs. Since the loan will have favourable terms, particularly a below market rate of interest, the value of this benefit over the life of the loan will be the equivalent of a grant.
The gross grant equivalent will be the present value of the difference between the market cost of interest and fees of a similar loan, using reference rates for interest, and the cost of an innovation loan. The present value is determined at the date of commitment of the loan.
For experimental development projects which are nearer to market, you can get funding for your eligible project costs of:
For more information on company sizes, please refer to the company accounts guidance.
If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.
Innovate UK may revoke our decision to provide funding without notice if government commitment for this initiative is withdrawn.
Innovate UK innovation loans are for highly innovative late stage research and development (R&D) projects with the best potential for the future. There must be a clear route to commercialisation and economic impact.
Your project must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.
Your project must demonstrate:
Your project can include:
These can be in environments that represent real life operating conditions.
We encourage innovation involving communities that are typically under represented including:
We particularly welcome applications from businesses from these communities.
Your application will be evaluated on:
We will decline applications for loans for businesses which:
Your project must focus on one or more of the following themes or sub-themes:
Net Zero
Health and wellbeing
Next generation digital technologies
Technology families
We will fund experimental development projects, as defined in the guidance on categories of research.
In this competition we are not providing grant funding.
We will not provide funds to match the grant funding of any projects.
We cannot fund projects that are:
10 July 2025 Competition opens
16 July 2025 Online briefing event: register to attend
Briefing slides will be available to download from Supporting Information after the event.
23 July 2025 Deep dive workshop 1 at 14.00 to 15.30: register to attend
30 July 2025 Deep dive workshop 2 at 09.30 to 11.00: register to attend
4 August 2025 Deep dive workshop 3 at 11.00 o 12.30: register to attend
27 August 2025 11:00am Competition closes
31 October 2025 Applicants notified
3 December 2025 Final lending decision notified
1 January 2026 Project start from
An application for an innovation loans competition needs different information from one for a grant application. Even if you have applied for funding from Innovate UK before, you are strongly advised to read the innovation loans guidance before you start.
We will run an online applicant briefing webinar on Wednesday 16 July 2025. This webinar will provide essential information on innovation loans, including the scope of the programme, the application process for both the project and financial aspects, the assessment process and the approach to our credit decision making process. This webinar will also be recorded.
We also encourage you to view our previously recorded webinars on creating a strong project application, and on the requirements for the business and financial submissions, which are available on the Innovate UK Business Connect website.
Applicants in this round will also have the opportunity to join an online financial submission ‘deep dive’ workshop, covering some of the most important financial aspects of suitability for a loan including:
Dates and a link to registration for these workshops and the webinars are in the dates section. Places in these workshops will be limited, to allow group discussion with our team.
We will not accept late submissions. Your application is confidential.
Entering into a loan agreement with us is a financial commitment. You need to confirm to us that the loan is for business purposes.
You are wholly responsible for ensuring that it is the right approach to financing your business. You must make sure that your business is legally allowed to borrow and you will be able to fulfil the repayment obligations under the loan. You should take expert advice before submitting an application.
By submitting an application you are providing authority for Innovate UK, and any subsidiary or agency appointed to assess your application, to carry out checks on the financial standing of your business.
This might include, but will not be limited to, checks with credit reference agencies (this may be recorded on your credit record) to determine your credit standing, identity, beneficial ownership and control and source of existing funds.
The principles that Innovate UK follows when we collect, hold or use your personal information and how you can check what details we hold are set out in Innovate UK’s personal information charter.
In the application process and as part of the loan agreement, we will require you, or the person appointed by your company to act for it, to enter into a legally binding declaration. You should take independent advice on the content of this declaration.
Before submitting, it is your responsibility to make sure:
You can reopen your application once submitted, up until the competition deadline. You must resubmit the application before the competition deadline.
What we ask you
The application is split into four sections:
This includes a link to questions that you must answer about your business. You must complete the spreadsheet template in full, to provide financial information about your business for the full period of your loan request.
2. Project questions.
3. Project finances.
4. Project Impact.
We will make our decision based on:
Quality of the project
This will be assessed by independent experts based on your answers to the project questions in this application and the finances you enter when describing your project.
Suitability of your business to receive a loan
This will be evaluated by Innovate UK’s credit team based on your answers to the business and financial details questions, along with your historic and forecast financial statements. We will include the results of the Early Metrics start up high growth index as part of this evaluation.
Your application will be considered based on the assessment of the quality of your project and an initial review of the suitability of your business to receive a loan. You will be notified if your application progresses to full credit analysis of your business.
If your application progresses, we may contact you for further information to reach our final decision. We may decide against offering a loan if the information you provide does not make an adequate case for your suitability.
You must complete and submit all parts of the application.
You need to be successful in all parts of the application before we will offer an innovation loan. The Innovate UK Loans Ltd credit committee will decide the final terms of the loan offer.
Accessibility and Inclusion
We welcome and encourage applications from people of all backgrounds and are committed to making our application process accessible to everyone. This includes making reasonable adjustments, for people who have a disability or a long-term condition and face barriers applying to us.
You can contact us at any time to ask for guidance.
We recommend you contact us at least 15 working days before this competition’s closing date to allow us to put the most suitable support in place. The support we can provide may be limited if you contact us close to the competition deadline.
You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).
This section provides background for your application and is not scored.
Business and financial information
This section is not scored by our assessors. The business and financial information will be used by us to consider the suitability of your business for a loan.
1. Business information
You must answer questions about your:
2. Financial information
You must provide financial information to us about your business. This is done through the full completion of the spreadsheet template that you must download and fill in offline. At the end of the business and financial information questions, you must upload the fully completed financial spreadsheet.
Application team
Decide which people from your organisation will work with you on the project and invite those people to help complete the application.
Application details
You must complete this section. Give your project’s title, start date and duration.
Research category
Select the type of research you will undertake
Project summary
Describe your project briefly and be clear about what makes it innovative. We use this section to assign the right experts to assess your application.
Your answer can be up to 400 words long.
Public description
Describe your project in detail and in a way that you are happy to see published. Do not include any commercially sensitive information. If we award your project funding, we will publish this description. This can happen before you start your project.
Your answer can be up to 400 words long.
Scope
Describe how your project fits the scope of the competition. You must show how your project fits with one or more of the future economy themes.
These are:
The themes are described in detail in the Innovate UK plan for action.
If your project is not in scope, it will not be sent for assessment. We will tell you the reason why.
Your answer can be up to 400 words long.
The assessors will score all your answers apart from questions 1 to 5. You will receive feedback for each scored question. Find out more about how our assessors assess and how we select applications for funding.
You must answer all questions.
You must not include any website addresses or links (URLs) in your answers. If you do, your application will be made ineligible.
Question 1. Applicant location (not scored)
You must state the name and full registered address of your organisation and any subcontractors working on your project.
We are collecting this information to understand more about the geographical location of all applicants.
Your answer can be up to 100 words long.
Question 2. Animal testing (not scored)
Will your project involve any trials with animals or animal testing?
You must select one option:
We will only support innovation projects conducted to the highest standards of animal welfare.
Further information for proposals involving animal testing is available at the UKRI Good Research Hub and NC3R’s animal welfare guidance.
Question 3. Permits and licences (not scored)
Will you have the correct permits and licences in place to carry out your project?
We are unable to fund projects which do not have the correct permits or licences in place by your project start date.
You must select one option:
Question 4. International collaboration (not scored)
Does your proposed work involve any international collaboration or engagement?
You must provide details of any expected international collaboration or engagement.
You must include a list of the names and the countries, any international project co-leads, project partners, visiting researchers, or other collaborators are based in.
You must also include details of any subcontractors or service providers.
If your proposed work does not involve international collaboration or engagement, your answer must confirm this.
Your answer can be up to 100 words long.
Question 5. Trusted Research and Innovation (not scored)
You must explain if your proposed project work relates to UKRI’s Trusted Research and Innovation (TR&I) Principles, including:
If your proposed work does not relate to UKRI’s TR&I Principles, your answer must confirm this.
We may ask you to provide additional TR&I information at a later date, in line with UKRI TR&I Principles and funding terms and conditions.
Your answer can be up to 400 words long.
Question 6. Project proposal
What is the business need, technological challenge or market opportunity behind your innovation? What approach will you take and where will the focus of the innovation be?
Describe or explain:
Your answer can be up to 800 words long.
You must submit one appendix. It can include diagrams and charts to help support your answer. It must be a PDF no larger than 10MB. It can be up to two A4 pages but must be legible at 100% zoom.
Question 7. Market opportunity
What does the market you are targeting look like and how are you going to grow your business as a result of the project?
Describe or explain:
Your answer can be up to 800 words long.
Question 8. Project delivery
Who is in the project team, what are their roles and how will you manage the project effectively?
Describe or explain:
Your answer can be up to 800 words long.
You must submit two appendices to support your response to this question.
You must submit an appendix containing a short summary of the main people working on the project to support your answer. It must be a PDF no larger than 10MB. It can be up to two A4 pages and must be legible at 100% zoom.
You must submit a project plan or Gantt chart as an appendix to support your answer. It must be a PDF no larger than 10MB. It can be up to two A4 pages and must be legible at 100% zoom.
Question 9. Project risks
What are the main risks for this project?
Describe or explain:
Your answer can be up to 800 words long.
You must submit a risk register as an appendix to support your answer. It must be a PDF no larger than 10MB. It can be up to two A4 pages and must be legible at 100% zoom.
Question 10. Project costs and value for money
How much will the project cost and how does it represent value for money for your business and the taxpayer?
Describe or explain:
Your answer can be up to 800 words long.
For an overview on what costs you can claim, see our project costs guidance. Note this is general guidance, for specific guidance please see the eligibility section in this competition.
This section is not scored but will provide background to your project.
You must complete the Project Impact questions before being able to submit the application.
More information can be found in our Project Impact guidance and by viewing our Impact Management Framework video.
Innovate UK complies with the requirements of UK GDPR and the Data Protection Act 2018, and is committed to upholding data protection legislation, and protecting your information in accordance with data protection principles.
Your application will be reviewed by three independent assessors based on the content of your application and their skills or expertise relevant to your project. All of the scores awarded will count towards the total score used to make the funding decision unless you are notified otherwise.
You can find out more about our assessment process in the General Guidance.
Your submitted application will be assessed against these criteria:
Innovation Loans Rd 22 - Assessor Guidance for applicants.pdf (opens in a new window)
Innovation loans will be made through Innovate UK Loans Ltd, a wholly owned subsidiary of UK Research and Innovation (UKRI).
The innovation loans scheme aims to provide finance that is affordable, patient and flexible for late stage innovation projects that have a clear route to commercial success.
They are aimed at innovative micro, small and medium sized enterprises (SMEs) who will be able to manage a loan, but who struggle to access finance or who need to raise funds alongside offers from commercial lenders or schemes backed by the British Business Bank.
Briefing recording and slides will be available to download here after the briefing event.
If you are unsuccessful with your application this time, you can view feedback from the assessors. This will be available to you on your IFS portal following notification and your Credit Feedback will be available via email.
Sometimes your application will have scored well, and you will receive positive comments from the assessors. You may be unsuccessful as your average score was not above the funding threshold.
We would like to remind you that eligible non-funded business can still benefit from fully funded and bespoke support from the Innovate UK Business Growth service.
Innovate UK Business Growth helps innovation focused businesses make the best strategic choices and access the right resources, in order to grow and ultimately achieve scale.
Our innovation and growth specialists provide our fully funded and bespoke support to clients nationwide. Visit the service’s website to discover whether you could benefit from this advisory support, which is available to Innovate UK funded and non-funded businesses alike.
A Secure Innovation campaign has been developed to help founders and leaders of innovative startups protect their technology, competitive advantage, and reputation.
This was developed by UK’s National Protective Security Authority (NPSA) and the National Cyber Security Centre (NCSC).
This competition is operated by Innovate UK.
Innovate UK is directly accountable to you for its holding and processing of your information, including any personal data and confidential information. Data is held in accordance with our own policies.
Innovate UK may also share any relevant information submitted and produced during the application process concerning your application with Innovate UK’s national and regional UK third parties and partners who may contact you. For more information see how we handle grant applicant and grant holder data.
Innovate UK and Innovate UK Business Connect will be data controllers for personal data submitted during the application.
Innovate UK Business Connect Privacy Policy
Innovate UK complies with the requirements of UK GDPR and the Data Protection Act 2018, and is committed to upholding data protection legislation, and protecting your information in accordance with data protection principles.
The Information Commissioner’s Office also has a useful guide for organisations, which outlines the data protection principles
If you need more information about how to apply or you want to submit your application in Welsh, email support@iuk.ukri.org or call 0300 321 4357.
Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).
Innovate UK or any of our partners will not tolerate abusive language in any written or verbal correspondence, applications, social media or any other form that might affect staff.