Alternative Sources of Non-Dilutive Funding

R&D tax credits are a fantastic source of funding for innovative SME’s, but with the HMRC tightening its grasp on the R&D tax credit scheme, many businesses are looking for additional sources of non-dilutive funding. Luckily, in the UK, there are other sources of funding that companies should also consider.

Sources of non-dilutive funding:

• Grants: Government bodies and industry associations often provide grants to businesses for a variety of purposes, such as developing new products or services, creating jobs, or investing in technology. These grants are non-dilutive, meaning that businesses do not have to give up equity in exchange for funding. However, the application process can be competitive, and businesses need to demonstrate that their projects align with the grant’s objectives.
• Loans: Many banks and financial institutions offer loans to businesses that do not require them to give up equity. These loans can be used for a variety of purposes, such as expanding operations, purchasing equipment, or investing in new technology. However, businesses need to be able to demonstrate that they have the capacity to repay the loan.
• Angel Investors: Angel investors are high-net-worth individuals who invest in early-stage businesses in exchange for equity. While this may involve diluting the ownership of the business, angel investors often provide non-financial support such as mentoring and industry connections that can be valuable to businesses.
• Crowdfunding: Crowdfunding is a way for businesses to raise funds from a large number of people. Platforms such as Kickstarter and Indiegogo allow businesses to pitch their ideas to a broad audience and receive funding in exchange for rewards such as early access to products or exclusive merchandise. This can be a good way for businesses to test the market for their products and raise non-dilutive funding.
• Accelerators and Incubators: Accelerators and incubators provide support and resources to early-stage businesses, such as office space, mentoring, and access to funding. Many accelerators and incubators offer non-dilutive funding in the form of grants or loans that can be used to support the development of new products or services.

Why non-dilutive funding?

Businesses should take advantage of non-dilutive funding because it provides them with access to funding without diluting their ownership or control. By securing non-dilutive funding, businesses can retain their equity and avoid the risk of losing control of their company. This can be especially important for early-stage businesses that are still building their operations and may not have a significant asset base to use as collateral for traditional financing.

Non-dilutive funding can also provide businesses with greater flexibility in terms of financing options. By accessing non-dilutive funding sources such as grants, loans, and tax credits, businesses can tailor their financing to their specific needs and requirements. This can help businesses to reduce financial risk, improve cash flow, and support their growth and development without sacrificing their ownership or control. Ultimately, non-dilutive funding can be a valuable source of support for businesses looking to accelerate their growth and achieve their goals.

Sprk Capital Advance Funding

Sprk Capital are a leading provider of R&D tax credit loans and grant advance funding. We help businesses access their capital quicker, without waiting on delays from the provider. We receive the advanced amount directly from HMRC, or another provider, once your claim is processed, removing any debt against the loan.

The process is easy, fees are straightforward, and you have even the chance to make your R&D funding go further.

If you think you could benefit from our advanced funding services, contact us for more information or simply apply here.