5 Government funding programs for Tech Companies
So, you’ve got a great idea but don’t have the means to fund it, what are your options? You could seek external investors to back your idea, through loan or equity capital, but these ultimately have their paybacks. Another area, to consider is grant funding – effectively a free source of money with no strings attached other than providing publicity for the funder and some reporting requirements.
To encourage technological innovation in the UK industry there are considerable public funds available to back new ideas right through from initial feasibility/proof of concept through to prototyping, with an emphasis on projects that will deliver new jobs and export markets. However, unlike other forms of finance, these are a well-kept secret and are not widely publicised/broadcast - here are 5 schemes worth considering:
1. The SMART program
Smart is a grant scheme run by the Technology Strategy Board (TSB) which offers funding to small and medium-sized enterprises (SMEs) to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge. A year round scheme, applications are made quarterly and provides funding of £25-250k for three main areas ‘Proof of Market’, ‘Proof of Concept’, ‘Development of Prototype’
2. Innovate competitions
The TSB also runs competitions in sector specific areas the UK government wants to stimulate innovative ideas in, recent areas include ‘flexible manufacturing’ ‘ICT’, ‘Aerospace’, ‘improving food supply chain efficiency’ and ‘wearable technology’. It could be they are looking for something in exactly the same area you are working in.
3. Innovation vouchers
Innovation vouchers offers businesses £5,000 towards the cost of collaborating with an external partner (e.g a University).
4. Horizon 2020 – SME instrument
An EU funded scheme this offers support to SMEs in a similar way to SMART with support of €50K for feasibility studies and - €.5-2.5M for implementation. Particular focus on biotechnology, blue growth, food production and processing, green technology, ICT, nanotechnology, security, space, or transport.
5. Creative Europe
This year, the EU’s MEDIA and Culture funds were combined under a cross-sectoral programme – Creative Europe. The new 7-year, €1.46 Billion programme supports the development of European films, TV and games, as well as cultural festivals, professional training, and literary translations.
If you don’t meet any of the criteria for grants and still require business loans, don’t despair, access to loan finance through banks is improving thanks to government backed schemes, such as the enterprise finance guarantee scheme. This scheme is designed to support small and medium-sized businesses, with a turnover of up to £41 million, with a viable business proposition but insufficient security or an inadequate track record to back their borrowing.
Alternatively a whole new sector of crowdfunding has expanded rapidly over the past few years through websites such as Crowdcube, Funding Knight and Money &Co where you can seek to raise loan or equity finance directly from private investors through an auction, with loan finance often attracting much lower rates than available through traditional sources.