About this programme
Innovation Loans are a debt-finance product run by Innovate UK, part of UK Research and Innovation (UKRI), through its subsidiary Innovate UK Loans Ltd. The product is built for UK-registered micro, small, and medium-sized enterprises that need capital to take a late-stage research and development project through to commercialisation.
The route into the loan is a two-stage process. A business first submits an Expression of Interest (EOI), a shorter screening application. Only businesses invited forward from the EOI stage are asked to submit a full loan application, which is assessed in more depth before any offer is made.
Loans run between £100,000 and £5 million and are structured in two phases: a project phase, during which the business draws down funds against agreed milestones, and a repayment phase. The product exists specifically for R&D that has moved past early feasibility and needs funding to reach the market, rather than for pure research or for working capital unconnected to a specific project.
How it works
The project must sit at 'Experimental Development' stage, with a project term of up to five years during which funds are drawn down quarterly against milestones.
The project phase is followed by a repayment phase of up to five years; the combined project-plus-repayment term cannot exceed seven years.
Interest is charged at 3.7% during the project phase and 7.4% during the repayment phase.
The loan can cover up to 100% of eligible project costs.
Security is taken via a debenture over the business; Innovate UK Loans Ltd does not require personal guarantees from directors.
Pre-commercialisation work packages are eligible, including labour, market testing, tooling, and a limited amount of working capital tied to the project.
Who can apply
Open only to UK-registered micro, small, and medium-sized enterprises (SMEs) applying as a single business — collaborative or consortium applications are not accepted for this product.
The project's results must be carried out and exploited within the UK.
Individuals, large companies, non-profits, charities, academic institutions, and research organisations are not eligible to apply.
The project must align with one of six Industrial Strategy sectors: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Digital and Technologies, Defence, and Life Sciences. Financial Services and Professional/Business Services projects are excluded.
Businesses in financial difficulty are not eligible.
Northern Ireland-registered businesses are subject to Windsor Framework restrictions, and all awards are made under the UK Subsidy Control Act 2022.
Innovate UK assesses a business's prior conduct as part of eligibility; outstanding payments owed to Innovate UK on earlier support may influence the decision.
How to apply
- Submit the Expression of Interest (EOI): a project summary of up to 1,000 words, selection of the relevant Industrial Strategy sector, and answers to nine set questions covering R&D stage, commercial maturity, cash position, breakeven timeline, investor details, funding strategy, desired loan size, fundraising plans, and any previous Innovate UK support.
- Upload supporting material with the EOI: a pitch deck (PDF, maximum 20MB), management accounts, and an overview of the team structure.
- Innovate UK reviews the EOI; up to three internal assessors evaluate the project proposal, the financial information submitted, and the business's suitability to manage a loan of this size.
- Businesses invited forward from the EOI stage are asked to submit a full loan application for further assessment before any offer is made.
- Note: the application cannot be reopened or edited once submitted, so it should be complete and reviewed before filing.
Documents you’ll typically need
- Project summary (up to 1,000 words)
- Pitch deck (PDF, max 20MB)
- Management accounts
- Team structure overview
Frequently asked
How much can we borrow through an Innovation Loan?
Innovation Loans range from £100,000 to £5 million, and can cover up to 100% of eligible project costs. The exact amount offered depends on the assessment of the project and the business.
What is the Expression of Interest stage, and is it different from the full application?
Yes. The EOI is a shorter first-stage screening application — a project summary, sector selection, nine set questions, and supporting documents. Only businesses invited forward from the EOI are asked to submit the full loan application, which is assessed in more depth.
What interest rate applies to an Innovation Loan?
The official page states 3.7% during the project (drawdown) phase and 7.4% during the repayment phase.
Do we need to give a personal guarantee to get an Innovation Loan?
No. Security is taken via a debenture over the business itself; Innovate UK Loans Ltd does not require personal guarantees from directors.
Which sectors can apply for an Innovation Loan?
Projects must align with one of six Industrial Strategy sectors: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Digital and Technologies, Defence, and Life Sciences. Financial Services and Professional/Business Services projects are not eligible.
Can a group of companies or a consortium apply together?
No. Innovation Loans are only open to single businesses applying on their own account — collaborative applications are not accepted under this product.
What stage of R&D does this loan fund?
The project must be at "Experimental Development" stage — later-stage R&D with a clear route to commercialisation and economic impact, rather than early feasibility or pure research.
Is there a deadline to apply?
The official page lists no closing date for this competition; it is described as open-ended, with EOIs assessed on an ongoing basis after the June 6, 2026 opening date.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.