How big is your grant?

The size of grants varies considerably between schemes, provider organisations and type of recipient.  It is also worth noting that the size of the grant can vary significantly in percentage terms as a proportion of the total cost of the project.  So, what does this mean for your R&D project?

Grant schemes can be a source of proof of concept (POC) funding, which usually runs from a few thousands of pounds to perhaps £50,000 in some cases.  POC grants are often 100% funded, as with the Horizon 2020 SME Mechanism Phase 1.

Beyond proof of concept, “skin in the game” becomes an issue and grants cover a percentage of project costs.  In most cases grants are restricted to 50% of project cost by international trade rules, as higher funding would be viewed as unfair market distortion.  The exception here are SMEs where grants up to 75% of project costs are allowed.

National grant schemes, such as Innovate, cover projects from a few tens of thousands to around £1 million.  In broad terms European funding steps in where National funding steps out typically covering projects from £1million to £10 million, with the average around £3 – £4 million.

Part of the role of grants is to reduce commercial risk, Government or other grant funders are encouraging businesses to engage in the risk of developing new products, new services and new technologies.  The award of a grant to some extent mitigates commercial risk, but funders want to see commitment, usually meaning some of your money is devoted to the project and a legacy which is where you deliver some of their agendas; such as increasing employment.  Grants for “development” projects, which are deemed less risky than “pure” R&D attract a lower funding rate, typically 30%.

There are exceptions to the grant model above; the NHS SBRI scheme for example, offers 100% funding through three phases starting at £100,000 for phase 1 and rising to £1 million for phase 3.  The wheeze applied here is that the scheme is “procurement” of R&D rather than a grant for R&D and the scheme is thus outside international trade rules, but as with its counterparts the US SBIR and the European PCP mechanism the company conducting the R&D retains the intellectual property.

Thus, selecting your source of grant funding is complex as it is not just about the amount of money you want, but how much you are able to invest in the game, an objective assessment of how risky you project is and awareness of specific schemes that apply to your business sector or type of business.

MSC R&D can help you through the entire grant funding process – contact us on 0114 230 8401