Innovate UK Innovation Loans: Secure Up to £2 Million for Future Economy Projects

Key Information

Funding Organisation	Innovate UK
Competition Title	Innovation Loans Future Economy: Round 20
Total Funding Available	Up to £25 million
Maximum Funding per Project	£100,000 to £2 million
Submission Deadline	2nd Jul 2025
Submission Portal	Innovate UK Online Submission Service
Contact Information	support@innovateuk.ukri.org

Innovate UK Innovation Loans Overview

Innovate UK Innovation Loans offers up to £25 million in loans to SMEs for highly innovative late-stage R&D projects. These projects should have strong commercial potential and the ability to significantly improve the UK economy. The loans are intended to support projects that 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.

Scope and Objectives of the Innovate UK Innovation Loans

The competition aims to support projects that:

• Lead to Commercialisation: Projects must have a clear route to commercialisation and economic impact.
• Innovative Solutions: Projects should focus on innovative new products, processes, or services, or propose innovative uses of existing ones.
• Future Economy Areas: Projects must align with one or more of the future economy areas included in the Innovate UK plan for action.

Application Process

Submission Deadline: Proposals must be submitted by 2nd Jul 2025 via the Innovate UK Online Submission Service.

Funding Rounds: The competition is part of a series of funding rounds, with the next round opening on the day the previous round closes.

• Round 21: Opens on 8 May 2025 and closes on 2nd Jul 2025

Eligibility

• Open to: UK-registered micro, small, and medium-sized enterprises (SMEs).
• Project Requirements: Projects can last up to five years, including both the R&D and commercialisation phases.
• Loan Amount: Loans can be between £100,000 and £2 million.
• Business Suitability: Applicants must demonstrate that their business is suitable to take on a loan, can cover interest payments, and will be able to repay the loan on time.

Evaluation Criteria

Proposals will be evaluated based on:

• Innovation: The project must demonstrate a clearly expressed and compelling innovative idea.
• Business Plan: A robust and deliverable business plan that addresses market potential and needs.
• Team Capability: A team with the necessary skills and experience to run and complete the project successfully.
• Risk Management: Awareness of all main risks with realistic plans to manage and mitigate them.
• Financial Plans: Sound, practical financial plans and timelines that represent good value for money and ability to repay the loan.
• Economic Impact: A clear, evidence-based plan to deliver significant economic impact and return on investment (ROI).

Key Industries and Focus Areas

Net Zero

• Energy: Projects aimed at developing sustainable energy solutions, including renewable energy technologies and energy storage systems.
• Industrial Processes and Materials: Innovations to reduce the environmental impact of industrial processes and the use of sustainable materials.
• Agriculture and Food: Technologies to reduce emissions in agriculture and improve food production sustainability.

Health and Wellbeing

• Tackling Ill Health: Projects focused on developing new treatments, medical devices, and health technologies.
• Enhancing Wellbeing: Innovations aimed at improving mental health, physical fitness, and overall wellbeing.
• Diet and Food: Solutions to improve nutrition and food security.

Next Generation Digital Technologies

• Advanced Computing: Projects involving artificial intelligence, machine learning, and advanced computing technologies.
• Bioinformatics and Genomics: Innovations in the analysis and application of biological data.
• Robotics and Smart Machines: Development of autonomous systems and robotics for various applications.

Technology Families

• Advanced Materials and Manufacturing: Innovations in materials science and manufacturing processes.
• Electronics, Photonics, and Quantum Technologies: Projects focused on developing cutting-edge electronic and photonic devices, as well as quantum technologies.
• Engineering Biology: Applications of synthetic biology and biotechnology in various industries.
• Energy and Environment Technologies: Solutions to address environmental challenges and improve energy efficiency.

Find out some of the project Innovate UK has funded over the past two decades here.

Costs of the Innovate UK Innovation Loan

Innovate UK Innovation Loans come with specific costs that applicants need to consider. During the availability period, which can last up to three years, borrowers will pay interest at a rate of 3.7% per annum on the amount borrowed, with additional interest at the same rate accrued and deferred until the repayment period. If the project extends into the extension period, which can last up to two years, no further drawdowns are allowed, but interest continues to accrue at 3.7% per annum. During the repayment period, which can last up to five years, borrowers will repay the principal amount along with the accrued interest on a quarterly schedule, with an interest rate of 7.4% per annum on the outstanding loan amount. The overall term of the loan must not exceed seven years. It is crucial for applicants to ensure that their business can manage these costs and maintain a healthy cash flow to cover both interest and principal repayments on time.

FI Thoughts

The Innovate UK Innovation Loans Future Economy competition offers a significant opportunity for SMEs to secure funding for innovative projects with strong commercial potential. To maximise your chances of success, consider using FI Group’s in-house loan application specialists. This service can help you strategically plan and develop your loan application, ensuring that all key criteria are met and your proposal stands out. With expert guidance and tailored support, FI Group can assist you in navigating the complexities of the Innovate UK Innovation Loans application process, identifying potential challenges, and crafting a compelling proposal. This comprehensive approach will enhance your chances of securing the funding you need for your innovative project.