The British Business Bank’s annual Small Business Finance Markets Report  provides a timely and comprehensive review of finance markets for smaller businesses.

This year, the report focuses on the impact of Covid-19 on small business finance markets and the implications for 2021, and the use of finance by smaller businesses and market developments in finance products.

With almost half (45%) of SMEs applying for external financial support in 2020, compared to 13% in 2019, four themes provide the background to the seventh edition of the Small Business Finance Markets report:

  • First, businesses shifted away from most traditional forms of external finance to utilise government-backed finance schemes and support. The utilisation of bank overdrafts, credit cards and asset finance all fell, while the only increase in the usage of traditional repayable external finance was seen in loans.
  • Second, smaller businesses have faced a lot of uncertainty in 2020 – with the smallest businesses hardest hit. A large proportion of businesses have been forced to seek finance due to the impact of Covid-19, most often to help with cashflow.
  • Third, as businesses continue to recover from the effects of the pandemic, there could be significant further demand for funding in 2021.
  • Fourth, the report finds that, due to record cash balances and increasing debt levels, there are both a sizeable number of smaller businesses in a position to borrow further in 2021 and a sizeable number likely to struggle with debt repayments.

Small Business Finance Markets 2020/21 report

Bring Innovation Grants into the Boardroom

As companies seek to refinance their businesses post-Covid, R&D driven ones should consider grant funding. However, because of the perceived risk involved with applying for grant funding, too many businesses see it as a purely short-term, opportunistic way of possibly generating some cash and therefore almost certainly ‘plan to fail’.

If treated properly, Innovation Grants funding can be a very attractive medium term strategic opportunity that should be put into the funding mix and planned in to a company’s Innovation and funding road maps. No external funding can be guaranteed, but with the right approach, the odds on getting a grant can be much improved. And, as importantly, the additional potential benefit

There are several UK and EU R&D grant funding programmes available to technology companies seeking to engage in the development of innovative and pioneering products.

Whilst some R&D Grant funding programmes differentiate between SMEs and Large Enterprises and some require collaboration, there are some general questions a company considering applying for R&D Grant funding must answer YES to before proceeding:

  • You have a long-term strategy for your technology or business
  • Your project is beyond the state of art with high innovation potential
  • You can demonstrate that your project delivers value for money and clearly benefits from the proposed injection of funds
  • Your business has sufficient funding to invest in the project and continue to trade during the project period
  • Your project will leave a legacy e.g. growing business, increased employment, protected IP etc
  • You can clearly demonstrate the market opportunity and how you plan to exploit it
  • You have a credible team to implement the project

Innovate UK SMART Grants

The most widely available grant is Innovate UK’s SMART Grant programme – generally a bi-monthly  opportunity for UK registered organisations to apply for a share of up to £25m from Innovate UK to deliver game-changing and commercially viable R&D innovation that can significantly impact the UK economy.

Projects must follow specific rules based on duration and cost.

  • 6 to 18 months with total eligible costs up to £500k. They can be single or collaborative in participation.
  • 19 to 36 months with total eligible costs up to £2m. They must be collaborative.

Projects are match funded up to 70%.

The next competition closes at 11am on 26 May 2021.

How can Infintec help?

We cover the whole non-dilution funding landscape – helping you identify and access the funding you need.

With over thirty-years’ experience of successfully applying for R&D grants, we realise how important they can be and how competitive they are. With average success scores of c84%, applications must be of the highest quality.

Our fast-track process starts with a comprehensive due diligence exercise to ensure that we have a project that ticks the boxes and fits with your R&D funding roadmap, before either party invests any more time and cost.

Once we have passed that milestone, we then work closely with you to complete your application.

If you think your project might qualify – give us a call on 01184 032994