Defence Innovation Loans May 2023
Loans of up to £2m to help convert your mature defence innovation into a strong business proposition for defence procurement, at low interest rates.
The Defence and Security Accelerator (DASA) supported by Innovate UK Loans Ltd (Innovate UK) are working together to offer a Defence funding competition: the Defence Innovation Loan. This service provides an opportunity for single small and medium enterprises (SMEs) with solutions to Defence themed problems to apply for a Defence Innovation Loan of between £100,000 and £2 million with a below market interest rate of 7.4% per annum. This loan can be used to cover up to 100% of eligible project costs to aid the commercialisation of the solution. Innovate UK provide further information on innovation loans (not Defence specific) here.
To take on a Defence Innovation Loan for a project you must:
- be a UK registered SME
- intend to exploit the results in the UK or overseas to make a significant and positive impact on the UK economy and / or productivity
- give evidence that your business is suitable to take on a loan.
Only SMEs are eligible to apply for Defence Innovation Loans; individuals, academic institutions, research organisations and large companies are not eligible. Only single businesses can receive innovation loans, so joint applications with other organisations cannot be funded in this competition (subcontractors are allowed, see further details below).
Your business can only submit one application per Defence Innovation Loan competition cycle. If you submit more than one application, only the first application will be considered for assessment. No Innovate UK loan must have been requested or awarded for the same project.
Innovations must be fairly mature at TRL 6 and above to ensure that the solution can be commercialised within the time scale of the innovation loan. Applications must clearly evidence a Defence need for the innovative solution.
Loans of between £100,000 and £2 million will be offered; applications requesting loans outside of these amounts will be ineligible and will not be considered. We will ask you to detail the total costs required for your technical project plan. If you are not requesting a loan to cover all of these costs we will ask you to indicate this and detail where the rest of the funding will come from and how much it is.
You could get a loan of up to 100% of your eligible project costs.
You can borrow in stages during the period. Interest rates are 3.7% per annum on the amount you have borrowed so far, rising to 7.4% after the first commercial sales of your product (or 5 years, whichever comes first).
On 13 December 2022, DASA and Innovate UK hosted a live webinar to answer all of your questions about Defence Innovation Loans, where viewers spoke to our panel of experts about how to submit a successful application.
For advice from Innovate UK KTN, contact Hazel Biggs, KTM Defence and Security.