Innovate UK Innovation Loan - Eligibility Criteria
If you’re an ambitious UK-based business looking to fund late-stage R&D, the Innovate UK Innovation Loan could be exactly what you need. This unique funding opportunity supports businesses ready to commercialise innovative products, services, or processes. But who exactly can apply? What types of innovation projects qualify? And what are the key Innovate UK Innovation Loan eligibility requirements?
In this blog, we explore the full scope of criteria — from who can apply to the rules on subcontractors, sanctions, and financial viability. For a broader overview of this government-backed loan scheme, see our complete guide to the Innovate UK Innovation Loan.
Who Can Apply for the Innovate UK Innovation Loan?
To be eligible for an Innovate UK Innovation Loan, your organisation must be a UK-registered micro, small, or medium-sized enterprise (SME). You must also:
Carry out your innovation project from or in the UK.
Intend to commercially exploit the results in the UK.
Provide financial evidence that your business can responsibly manage and repay the loan.
Large enterprises, not-for-profits, charities, research organisations, and academic institutions are not eligible. Also, only single applicants may apply — collaboration with other organisations will not be funded in this competition.
For full and up-to-date eligibility criteria, visit the official Innovate UK Innovation Loan page.
What Is an SME for Innovate UK Innovation Loans?
For the purposes of the Innovate UK Innovation Loan, a small or medium-sized enterprise (SME) is defined using the standard UK and EU criteria. Your business qualifies as an SME if it meets the following conditions:
Micro business: Fewer than 10 employees and an annual turnover or balance sheet total of under €2 million.
Small business: Fewer than 50 employees and an annual turnover or balance sheet total of under €10 million.
Medium-sized business: Fewer than 250 employees and an annual turnover of under €50 million or a balance sheet total of under €43 million.
These thresholds apply to your entire group if your business is part of a larger organisation or linked enterprise. For more detail on company size definitions, consult the UK government company accounts guidance.
What Type of Innovation Projects Are Eligible?
Projects funded by the Innovate UK Innovation Loan must be focused on late-stage research and development and commercialisation. Your project can last up to five years, covering both the R&D and Pre Commercialisation Stages. Everything up to but not including sales.
Loans are available between £100,000 and £2 million, and can cover up to 100% of your eligible project costs. Eligible costs must be entered accurately during the application process. To ensure your project plan fits, see our application guide.
Subcontractors and Overseas Procurement
Subcontractors are permitted, including those based overseas — but this must be justified clearly in your application. If you use international suppliers, you must:
Show why UK-based alternatives were unsuitable.
Present evidence of outreach to UK suppliers.
Justify the cost and necessity of your chosen partner.
All subcontractor costs must be proportionate and fully aligned with your project’s objectives.
One Application Per Round
You may only submit one Innovate UK Innovation Loan application per competition round. Multiple submissions will be disqualified. Additionally, you cannot apply for this loan while applying for another innovation loan or defence innovation loan competition at the same time.
Sanctions, Ethics, and Compliance
Funding will not be awarded to any business, individual, or supply chain partner associated with UK sanctions. Compliance with ethical and welfare standards is also essential, especially if your project involves animals in research.
Resubmissions and Past Performance
You are permitted to resubmit a previous application that reached the assessment stage – but only once. Reapplications must be materially different. You will not be eligible if:
You failed to exploit a previously funded project.
You have overdue financial reporting.
You have breached previous Innovate UK terms.
Financial Viability and Subsidy Rules
Your business must pass financial viability checks. Innovate UK will not fund any organisation deemed to be in financial difficulty.
Loans are structured to align with the Subsidy Control Act 2022. Most UK applicants will fall under this regime, while some Northern Ireland-based applicants may fall under the Windsor Framework and EU State Aid rules.
The innovation loan is a subsidy, calculated based on the below-market interest rate and terms.
Is Your Business Eligible?
With up to £25 million available in this funding round, the Innovate UK Innovation Loan offers a powerful route for ambitious UK SMEs to take their R&D to the next level.
If your innovation project is ready for commercialisation, and you meet these eligibility criteria, this could be the ideal funding option.
Have questions about Innovate UK loan eligibility? Call our Innovation Loan Team today on 07868 748856 or get in touch via our contact form.
Want more guidance? Explore our full Innovate UK Innovation Loan overview or read our step-by-step guide to applying successfully.