10 facts about R&D Grant Funding you should know before applying

May 8, 2024

R&D Grant Funding is money channelled by government agencies to businesses, organisations and researchers to fund the process of researching and developing innovative products, processes and services.

R&D grants are also known as: Research & Development Grants, R&I Grants, (Research & Innovation Grants), Innovation Grants, Research & Innovation Actions (RIA), Innovation Actions (IA) and Coordination & Support Actions (CSA).

In this article we provide 10 facts about Innovation Grant Funding that your business or organisaiton should know before applying.

1: Who can apply for R&D Grant Funding?

R&D Grant Funding is available for a wide range of businesses and organisations, including:

  • SMEs
  • Large Companies
  • Universities & RTOs (Research & Technology Organisations)
  • Public Sector Bodies (such as a local authority or city administration)
  • Charities & Non-Governmental Organisations

Crucially, these businesses and organisations should be seeking to research and develop innovative, disruptive and impactful products, processes and/or services.

2: How much money can I get from R&D Grant Funding?

The range of funding available through R&D Grants is generally between £/€50k to £/€20m. This is a huge range and will depend on the specific call for funding and how many partners are working together on the specific R&D project. In general terms:

  • R&D Grant Funding for SMEs ranges between £/€50k and £/€2.5m
  • R&D Grant Funding for Researchers, Universities and RTOs ranges between £/€750k and £/€5m
  • R&D Grant Funding for Collaborative Projects ranges between £/€250k and £/€20m

Keep in mnd that some R&D grants offer funding at the start of the project (mainly European R&D Grants) while some require the applicant(s) to cashflow the first quarter of the project before retrospectively paying the first grant claim.

3: Does R&D Grant Funding have to be repaid or exchanged for equity?

R&D Grant Funding is non-dilutive and non-repayable, meaning there is no equity or debt involved from a business perspective. This makes R&D Grant Funding an attractive source of funding, typically offered to cover the costs of high-risk innovation projects that could have significant economic and societal impacts.

4: What costs does R&D Grant Funding cover?

R&D Grants cover the costs of researching and developing innovative products, processes and/or services, with the following categories in scope:

  • Labour: Wages for Technical and Project Staff, including social security and pension contributions
  • Overheads: A flat overhead rate (20% for businesses, higher for non-business) covering office rent, heat, light, IT, etc
  • Materials: Software Licenses, Cloud Computing and materials needed for testing
  • Capital: Machines, IT Equipment, etc
  • Subcontractors: External expertise including technical and professional advisors
  • Travel: Project Management Travel and Subsistence, Attendance at Conferences
  • Other: Legal Advice, Regulatory Advice, Market Research, Licensing, etc

Typically, labour costs would make up the majority of an R&D project and can cover existing staff time + new hires if needed.

5: Does R&D Grant Funding cover 100% of project costs?

R&D Grants cover up to 100% of total project costs, depending on the specific call, the technical-readiness-level and the legal status of the applicant(s). Here is a rough guide to funding rates:

  • Small Businesses can expect 70% of their project costs to be covered by an R&D grant (from Innovate UK and EIC Accelerator and IAs under Horizon Europe for example). Collaborative Research & Innovaiton Actions (under Horizon Europe) offer 100% funding of project costs. Eurostars offers a 60% funding rate for innovation projects.
  • Medium-sized businesses can expect 60% of their total project costs to be covered by an R&D grant. This can increase to 100% depending on the specific call (RIAs under Horizon Europe offers 100% funding).
  • Large companies can expect 50% of their costs to be covered by an R&D grant. Again, this can increase to as much as 100% (Horizon Europe RIAs and EIC Pathfinder for example).
  • Universities, RTOs, Social Enterprises, Charities, NGOs and public bodies can expect 100% of their project costs to be covered by R&D grant funding.

The difference between the Total Project Cost and the Grant Funding is called the Match Funding. This is the % of total project costs that the applicant(s) will have to fund of the R&D project.

6: Does R&D Grant Funding need to be collaborative or can we apply alone?

R&D Grant Funding can be applied for as a single applicant or as a consortium of 2 or more partners. Some Horizon Europe projects can have more than 20 partners, but typically this is between 4 and 20 in a consortium.

R&D grants designed for SMEs will generally accept applications from 1 – 5 partners, with single applicant funds being widely available (EIC Accelerator and Innovate UK Smart are good examples). Eurostars, that runs twice a year with deadlines in February and September, requires 2 applicants from 2 countries to apply, offering €350k per partner.

7: What are the timeframes involved in R&D Grant Funding?

There can be quite a bit of variation in the timeframes set by R&D grant funders, so here is a quick guide:

  • Business Targeted R&D Grants: Allow about 8 weeks to develop a compelling application, 8 weeks assessment time and 4 weeks project setup time. This applies to Innovate UK Grants, EIC Accelerator, Eurostars, for example.
  • Collaborative Grants: Allow 12 – 24 weeks to develop the application as there is more time needed for collaborative meetings. Decision time by the funder can take between 8 – 20 weeks, followed by a 4 – 8 week project setup phase. This applies to most of the Horizon Europe collaborative calls (RIAs, IAs and CSAs).

Once live R&D grant funded projects can last anywhere between 6 – 60 months, depending on the budget, number of partners, call scope and preference of the applicant(s).

8: What are the key elements of an R&D Grant Funding application?

There are specific requirements in the application form of R&D Grants, summarised here:

  • Problem / Solution / Impact: An overview of your business/organisation, the problem you are attempting to address, your solution and the potential impact of your solution
  • Innovation: Details on the work you have done to date, the current state of the art solution in the market and how your solution goes beyond that current state of the art to disrupt/innovate
  • Team: Your expertise, experience, consortium, advisors, etc
  • Market & Route to Market: The market you are targeting with your completed solution, along with your approach to commercialising the innovation (ideally globally)
  • Impact: The impact grant funding will have on your business/organisation, your partners, your supply chain, the wider economy, citizens, government policy, etc
  • Funding Need: The justification for grant funding from the government and why you cannot raise the funds from elsewhere (grant funding is defined as a “funder of last resort”)
  • Project Plan: Details about how you will deliver your project
  • Project Budget: The project costs, broken down into categories 
  • Annexes: Supporting documents to back up claims made in the main application.

R&D Grant applications can range in length from 20 pages (EIC Pathfinder, Innvoate UK Smart Grant) to 50 pages (EIC Accelerator, Eurostars), and collaborative R&D grant applications can be over 150 pages in total.

9: What are the reporting requirements for a live R&D Grant-funded project?

Once approved for funding, there are reporting requirements for all R&D grant projects. Typically, progress reports and financial claims will need to be submitted every 3 months, although Horizon Europe funded projects now have real-time project reporting. It is likely that a meeting with the assigned Project Monitoring Officer will be arranged every 3 months, which can be conducted online in most cases. There is likely to be a final project report due at the end of the project. 

10: How can I find out about R&D Grant Funding opportunities?

Take a look at some of the more common funders:

  • Innovate UK: For UK-based applicants. There tends to be around 20 live calls for projects open at any one time with a range of topics.
  • EIC Pathfinder, Transition and Accelerator: Run by the European Research Council and open all year round with funding for businesses, universities and researchers. 
  • Eurostars: For SMEs seeking to collaborate on R&D projects across the world with deadlines spread across the year.
  • Horizon Europe: Hundreds of live calls (the 7 year programme has a €100bn budget to 2027) with most calls being collaborative in nature and covering a huge range of topics.

Summing Up

Hopefully this has given you a clearer understanding of the opportunities offered by R&D grant funding. Our team at Venturenomix have been helping businesses and organisations find R&D grant funding opportunities, build consortiums, developing winning applications and project managing live projects since 2008. Please get in touch if you would like our help.

ABOUT THE AUTHOR

Alex has over 15 years of experience in founding and running businesses, the most recent company having raised over £50m in funding for businesses based across the globe. He has a thorough knowledge of business funding options and can draw on many successful consultancy engagements to bring impetus to venturing. Alex has now set his focus on working with entrepreneurial teams looking to make a positive impact on the climate crisis and the broader UN Sustainable Development Goals.

Contact Alex