Tag Archive for: R&D Lending

How CFOs Plan R&D Funding for HMRC and Innovate UK Timelines

How CFOs Plan R&D Funding for HMRC and Innovate UK Timelines

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R&D delivery runs on calendars and cash dates. Claims, milestone dates and supplier lead times rarely move, so the plan works only when R&D Funding lines up with real costs. SPRK Capital focuses on non‑dilutive funding that follows your project cadence. We are backed by a £20 million facility from British Business Investments, which gives dependable capacity as programmes scale.

What sits under “R&D funding” in the UK?

R&D funding combines grants, tax relief and innovation‑aligned lending.

  • Grants (for example, Innovate UK) support specific projects and pay in arrears against eligible, evidenced costs. View our hub on R&D grants.
  • R&D tax relief reduces corporation tax or produces a payable credit after year‑end when claims are filed. Read on R&D Tax Credit Loans for bridging options to expected receipts.
  • Innovation‑aligned lending provides working capital around pilots, certifications and early go‑to‑market. Check our Innovation Term Loans page for more information.

How do Innovate UK grants pay?

Most grants pay in arrears against costs you have incurred and paid, once monitoring and evidence checks complete.

Start delivery only after the project is set up and the official go‑live is confirmed. Keep invoices, proof of payment and timesheets aligned to the eligible cost categories in your offer letter annexes. Many competitions use quarterly claims; some align payment to milestone approvals. In both cases cash lands after evidence review, which means payroll and supplier dates can arrive before receipts.

What does your Monitoring Officer check before a claim pays?

Innovate UK grants are paid in arrears once you incur, invoice and pay eligible costs, then evidence them in the portal. Before a claim reaches Innovate UK, your Monitoring Service Provider (MSP) reviews the pack against the offer letter and annexes. Expect to provide invoices and proof of payment, timesheets mapped to eligible categories, and short progress notes that show you have met the period’s deliverables. Claims can be queried or held until evidence is complete, so keep the trail clean and dated to reduce delays. This is why payroll, deposits and booked lab/certification time can land before cash does and why CFOs plan R&D funding to your claim windows or milestone dates, not just the project plan.

Where do timing gaps hurt delivery?

Gaps appear when payroll, supplier pre‑payments and booked lab or certification time arrive before a grant or credit is received.

Pressure points include payroll between sprints, minimum order quantities with deposits, laboratory bookings, certification runs and scheduled pilot trials with partners. If a date slips, acceptance can move into the next window and delay revenue recognition. When scope or timing must change, raise a project change request early so claims stay aligned to the approved plan.

What does a 12–18 month R&D Funding calendar look like?

Map funding to the same calendar you use for delivery and acceptance.

  • Months 0–3: Finalise set‑up and go‑live. Lock supplier deposits and facility bookings. Build the evidence trail from day one.
  • Months 3–6: First claim window opens. Prepare invoices, proof of payment and timesheets. If dates are fixed and cash is tight, consider a Grant Advance Funding facility aligned to the relevant claim window or milestone date.
  • Months 6–12: Year‑end and R&D claim preparation. Profile eligible activities and costs with your advisers. If delivery depends on the expected credit, explore R&D Tax Credit Loans to bridge to HMRC receipt.
  • Months 9–18: Pilots, certifications and early go‑to‑market. Use Innovation Term Loans to fund working capital with a clear plan and reporting cadence.

What documents keep claims moving on time?

Keep a short, current pack that matches how schemes review evidence.

  • Award letter with annexes and the latest milestone schedule.
  • Project plan or Gantt with dated tasks, owners and milestone dates.
  • 13‑week cash‑flow and recent management accounts for cash timing.
  • Invoices and proof of payment; timesheets mapped to eligible categories; short progress notes and outputs where required.

This keeps R&D funding predictable and claims on time.

How do boards and investors view R&D Funding in 2025?

They want evidence discipline, credible schedules and transparent funding lines that match the plan.

Boards expect claims to be supported by clean records, clear ownership of tasks and consistent cash‑flow forecasting. Investors look for non‑dilutive options that extend runway ahead of value inflection points. SPRK’s capacity is strengthened by our partnership with British Business Investments, which supports eligible drawdowns as programmes scale.

When should a CFO speak to a funding partner?

Speak to us before you lock in payroll, place supplier orders or book lab or certification time. We will check your dates with you and confirm if funding can match them. You do not need a full pack to start; tell us the next key date and the costs that fall before it.

If it fits, we will send a clear plan that sets out the amount, timing and costs in writing so you can brief the board with confidence. When you want R&D Funding that lines up with your project calendar, contact us.

 

Plan Your Cash Flow to Maximise R&D Funding

Plan Your Cash Flow to Maximise R&D Funding

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Build a weekly cash view, line up your R&D claim timetable, and use non‑dilutive tools so you can invest in innovation without liquidity shocks.

Before you choose a facility, run a 10-minute audit: list the next two claim windows, period end, payroll Fridays, and any supplier ship dates. If the dates do not line up, R&D Advance Funding turns the plan into a cash timetable you can run. It stops end-of-month scrambles and awkward supplier calls.

How do we turn the R&D timetable into a cash timetable?

Put period end, AIF, filing, and an indicative receipt window on one calendar with payroll and supplier dates.
Put everything on one calendar with payroll and supplier commitments. Use that calendar as your plan of record. Lock it to real artefacts: the AIF submission date, the claim workbook tab, supplier pro formas, and payroll Fridays. Submit the AIF before or on the same day as the CT600 and submit it first. If the tax return arrives first, HMRC treats the claim as invalid. Treat AIF, filing, and receipts as gates on that calendar, and backsolve your draw dates from them.

Artefacts: AIF checklist and receipt email; CT600 submission ID; claim workbook tab; evidence folder (invoice, bank Tx ID, deliverable link); board pack dates.

How do you build a weekly cash‑flow forecast for R&D?

Forecast at least one cash cycle, reconcile weekly to the bank feed, and show minimum cash plus buffer.

  • Inflows: revenue, grant receipts, the R&D receivable.
  • Outflows: payroll, suppliers, VAT, rent, debt service.
  • Scenarios: low / base / high; mark minimum cash and your buffer.
  • Weekly ritual: update, variance check, actions.

Reconcile to the bank feed CSV and note Tx IDs for any cost lines that will go into the claim. Ring-fence R&D lines in the GL so the claim workbook lifts straight out of finance. Treat last week’s variance as a to-do list. Fix dates or cut spend. Don’t carry it forward. True‑up the forecast after each claim receipt.

Keep the forecast and the evidence in one workspace. This mirrors the British Business Bank’s four‑step cash‑flow method.

If the low‑case forecast dips toward buffer before the receivable lands, R&D Advance Funding can bridge the gap without equity.

Want a quick forecast sense‑check?

Use the contact form to share your forecast horizon and a recent bank feed export (CSV). We’ll confirm what to send for an indicative review and next steps, subject to diligence and credit approval. Contact the SPRK team.

When should we use R&D Advance Funding?

Use it if the forecast dips toward buffer before the receivable lands; skip it if scope drifts or evidence is weak.

  • Hiring or lab set‑up needs to start before the claim pays
  • Hardware or tooling deposits land ahead of filing
  • Supplier terms that beat HMRC timing

When not to use it: skip it if scope keeps drifting, evidence is weak, or claim dates slip repeatedly. If you can’t keep the claim calendar current weekly, pause and wait until the next window.

How should we size and structure R&D Advance Funding?

Size to low‑case timing, hold two months of burn, stage draws to POs and payroll, and re‑test the trough month.

  • Hold two months of burn above minimum cash. If you can’t, cut the facility or shorten availability.
  • Stage draws if spend is phased; align to purchase orders and payroll cycles.
  • Fit test: the trough month still clears repayments; a small prepayment helps when the receivable lands. (For example: £180k burn with £45k amortisation ⇒ trough week ≥ £225k after prepay.)

How do we size R&D Advance Funding for long lead times? Split the deposit and shift the balance to the ship week; re‑test the trough month and align each draw to the payable date.

If–then triggers

  • If supplier lead time exceeds eight weeks, stage the deposit draw and move the balance to the week the parts ship.
  • If reimbursement covers at least 50% of the drawn amount, prepay that week to step repayments down.
  • If a key date slips by more than 14 days, freeze non‑critical POs until the calendar is re‑baselined.

What if burn rises mid‑project? If burn rises by >10% vs forecast, freeze non‑critical POs until the claim window or shorten the availability.

What will a lender ask for to move faster?

Bring AIF, claim workbook, 12‑month forecast, bank statements, and an evidence matrix (invoice ↔ Tx ID ↔ deliverable).

  • AIF summary and the claim workbook for the period
  • Management accounts and a 12‑month forecast
  • Bank statements (3–6 months) and AR/AP ageing
  • Evidence matrix for eligible costs: invoice number, bank Tx ID, the deliverable link on the same row, and a defrayal date inside the claim period

If a line is missing any one of those items, leave it out until it is complete. If a deliverable sits outside the claim period, apportion it and keep the note in the workbook. HMRC can request documents, visit sites, or interview staff during a compliance check. Build the evidence folder to that standard. It cuts rework and shortens time‑to‑cash.

How does R&D Advance Funding improve cash flow?

Work the loop: draw → defray → claim → reduce; prepay on receipt so repayments step down.

Work the loop in order: draw for planned work, pay and capture evidence, file the claim, then use the repayment to bring the balance down. A weekly forecast and evidence run keeps supplier terms and helps payroll land on time.

Example: draw £180k for two months of burn; when a £110k receivable lands, prepay that week so the next repayment drops and minimum cash stays above buffer even if claims land late. It beats chasing Tx IDs the night before filing day.

Typical outcomes: a missed AIF window led to resequenced spend and a shorter availability window that kept minimum cash; a nine‑week supplier delay was handled by a 30%/70% split tied to ship week, and the trough month cleared comfortably.

When the process runs clean, repayments and receipts step down together.

Want an indicative draw plan?

Use the contact form to share context: AIF status, forecast horizon, and recent bank statements. The team will arrange a short call to discuss an indicative approach and what we would need for diligence and credit review. Contact the SPRK team.

What costs and risks should we plan for?

Compare on all‑in cost to maturity; plan buffers for HMRC timing and evidence gaps.

Costs: interest, an arrangement fee, legal and diligence costs, and any maturity or prepayment terms. Price R&D Advance Funding on all‑in cost to maturity, not teaser rates. Confirm early‑repayment terms and how claim funds flow so the process stays straightforward.

Risks: HMRC queries, evidence gaps, receipt delays. Mitigate with a claim calendar, freeze scope two weeks before filing, reconcile the bank feed to your evidence weekly, and stage advances against the low‑case timing. Plan for HMRC variability and build buffers instead of relying on a fixed repayment week. Align repayments to receipt weeks and protect the buffer. If HMRC slips by two weeks, your buffer should still cover one full payroll and your top three suppliers.

Where does R&D Advance Funding fit with other non‑dilutive tools?

Pair with Innovation Term Loans for multi‑year runway; use grant advances for milestone months.

Use Innovation Term Loans for multi‑year predictability, team build‑out and capex. If you also run a grant project, use grant advance funding for milestone months while you keep R&D Advance Funding aligned to the HMRC receivable. From 1 April 2024 most claims sit in the merged scheme. Loss‑making, R&D‑intensive SMEs may opt for ERIS at a 30% intensity with a one‑year grace. The credit is taxable and interacts with corporation tax. The pre‑merger RDEC rate rose to 20% for costs from 1 April 2023.

Ready to model your draw schedule?

Use the contact form to share your AIF status, forecast and recent bank statements. We’ll confirm next steps for an indicative assessment, subject to diligence and credit approval.

R&D Advance Funding works when it follows your plan. SPRK can map draws to dates, tie evidence to spend, and keep documentation simple so delivery doesn’t slow down. Use the contact form to introduce your company and timeline; we’ll confirm what information to provide and, if suitable, discuss an indicative draw approach and repayment profile, subject to diligence and credit approval. Contact the SPRK team.

 

Biotech company using venture debt to grow their smart farm facility

The Rising Need for Venture Debt in Biotech

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The biotech industry stands at the forefront of scientific innovation, driving advancements that promise to revolutionise healthcare, agriculture, and environmental sustainability. However, the path from groundbreaking research to market-ready solutions is full of challenges. The core of these challenges is typically securing adequate funding. Delve into why venture funding, including venture debt, has become increasingly vital for fuelling the biotech sector’s growth and how it’s shaping the future of innovations.

The Changes in Biotech Funding

The biotechnology sector has encountered significant changes in its funding, particularly during the bull market of the late 2010s and early 2020s. This period was marked by record funding levels, a thriving IPO market, and the emergence of Special Purpose Acquisition Companies (SPACs) as crucial avenues for entering the public market. However, this growth was abruptly disrupted by rising interest rates and increased market volatility. This led to a downturn in IPOs and a decreased interest in SPACs, resulting in a 24% reduction in capital raised by biotech firms in 2022. This pullback underlines the broader market instability, impacting investor confidence and forcing a re-evaluation of capital allocation strategies.

In response, biotech companies are now compelled to diversify their financial strategies beyond traditional equity funding, increasingly turning to the likes of venture debt and other alternative mechanisms to secure essential capital for R&D and commercialisation. This shift towards a more strategic funding approach, balancing venture capital with venture debt, aims to effectively manage equity dilution and extend financial runways. Facing these challenges, the sector needs to be flexible and consider different funding options. This flexibility helps keep innovation and progress alive, ensuring that new breakthroughs keep coming despite economic difficulties.

The Growing Role of Venture Debt in Biotech

As the biotechnology sector continues to mature, the role of venture debt has become increasingly significant, offering an alternative to the traditional venture capital route. This form of debt financing stands out as an appealing option for:

  • Biotech companies looking to extend their financial runway without immediately seeking more equity financing.
  • Funding critical development milestones, supporting ongoing operations, or bridging financial gaps to commercialisation. This strategic tool provides essential capital at crucial times without surrendering more company ownership.
  • As a source of non-dilutive funding with flexibility, it serves as a perfect way to meet the needs of a business’ innovation fund.
  • Being customised to specific financial requirements, potentially offering lower costs over time due to reduced equity dilution.
  • Including manageable covenants and repayment terms that align with the growth path of promising biotech firms.

By strategically utilising venture debt built for innovation, biotech companies can secure the funding they need for critical research and development whilst maintaining greater control over their company’s future and equity structure. This approach to financing supports sustained growth and innovation in the biotech sector, enabling companies to navigate the path from research breakthroughs to market-ready products more efficiently.

The Future of Venture Funding in Biotech

As the biotech industry continues to evolve, its dependence on venture funding is predicted to intensify, propelled by rapid innovation and the broadening range of biotech applications. The future of venture funding in biotech is likely to see:

  • A shift towards prioritising sustainability and social impact in investment decisions, reflecting a global trend across industries.
  • The advent of emerging technologies within the biotech space is expected to draw even more attention from venture debt investors.
  • The European market, with its robust R&D activity, remains a critical catalyst for biotech advancement despite the more attractive valuations in American markets. This trend highlights the global nature of biotech funding, where geographical diversity can complement and enhance the sector’s overall growth and innovation capacity.

However, biotech companies are adjusting their funding strategies in response to a more competitive and selective investment environment. The downturn in global stock markets, particularly the NASDAQ, has narrowed the IPO path that once offered a lucrative exit strategy. In this tighter funding climate, private investments demand clearer demonstrations of value and utility, pushing biotech firms towards alternatives like acquisitions by larger pharma companies or strategic partnership deals.

These larger entities have historically relied on biotech for pipeline enrichment, favouring assets further along in the development process and presenting a lower risk. Early economic evaluations and strategic planning are becoming increasingly important for biotech firms aiming to secure Series A investments. This highlights the need for innovative science and savvy business strategies to attract critical funding.

Non-Dilutive Funding Solutions with SPRK Capital

Our latest product – the Innovation Term Loan – can provide the smart, non-dilutive funding solution your SME needs to grow without sacrificing equity. It has been designed to address the gap between R&D lending and venture debt to create a new type of innovation finance. Contact us for more information and secure the funding you need.

Solar panel installation to achieve net-zero, done with innovation-funding

Understanding Net-Zero and how Innovation Funding Will Help

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Whether you’re already working towards ‘net-zero’, or only just hearing about it, it’s important to understand it. After the COP26 summit in Glasgow, it’s become a large focus for many innovative companies. So – what does it really mean for businesses across the UK? Let’s unpack net-zero and see how getting creative with funding can make a big difference.

What Does Net-Zero Really Mean?

In simple terms, net-zero is about achieving balance. Not making zero emissions but making sure we add no more to the air than we take away. It’s crucial for tackling climate issues worldwide.

The UK has set a bold deadline – net-zero by 2050, and it’s not just talk; it’s law. This target puts us in the lead, but it’s a huge challenge that needs every sector to pull its weight. It’s important to stress this, as we typically think of something generic such as energy but in truth sectors such as agriculture, construction, manufacturing also play a large part.

Why R&D Matters for Net-Zero

Reaching net-zero demands innovation across all sectors, not just from the big tech companies or labs. It’s about making products and processes greener, a challenge that calls for creative thinking and Research and Development (R&D). This push towards sustainability has made R&D essential, and it’s being supported by innovation funding to ease financial pressures on businesses eager to adapt. As a result, R&D is a great contributor to any environmental strategy. Its role in driving sustainable growth and helping achieve net-zero targets cannot be understated.

Even projects not directly focused on sustainability can qualify for R&D if they tackle environmental challenges, like adapting to regulatory changes. This broad view of R&D highlights its importance in meeting the UK’s carbon ambitions, offering financial incentives for businesses innovating towards a more sustainable future. Essentially, R&D fills the gap between current practices and the more sustainable processes necessary for a net-zero future.

Innovation Funding for Net-Zero Businesses

Innovative finance solutions, like R&D tax credits, is a game-changer. It gives businesses a nudge to explore new, eco-friendly ideas without fretting over the financials. Further to this, our SPRK Innovation Term Loan is perfect for businesses pushing towards net-zero. Benefit from a non-dilutive funding source which can accelerate your innovation fund. We’ve built this product to bridge the gap between R&D lending and venture debt. This makes it a perfect solution for businesses working towards net-zero.

Boost your Innovation Fund

Combining net-zero ambitions with R&D is vital for UK companies, and our innovation funding solutions provide a tangible way to make a difference. It encourages companies to adopt innovative approaches without hesitation. Our Innovation Term Loan supports projects that aim for a greener future. Start exploring how this funding can help your business contribute. Get in touch to learn more.

Growth company discussing innovation fund following investment from a venture debt alternative

Why Venture Debt Works for Tech Start-ups and Growth Companies

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Looking for funding without losing equity? Tech start-ups and growth companies are turning to venture debt as a smart option. It’s a great way to get extra funds without giving up a piece of your company. Let’s explore how venture debt works and introduce an alternative for innovation funding.

What Is Venture Debt?

Venture debt is essentially a loan aimed at companies with high growth potential but not enough assets for traditional debt financing. It’s a smart choice for those looking to extend their cash runway without giving away equity. This type of loan is typically secured against future revenue or intellectual property, making it particularly suitable for tech and life sciences sectors.

Structure and Characteristics

The structure of venture debt varies but generally involves short to medium-term loans, which can be secured or unsecured. They often come with warrants, giving lenders a potential equity upside. This arrangement makes it an attractive proposition for both lenders, who get a safety net, and borrowers, who avoid diluting their ownership.

Why Venture Debt is Becoming a Popular Option

With the current economic uncertainty, companies find themselves navigating through tight financial straits. Due to being a source of non-dilutive funding, venture debt stands out for those looking to avoid dilutive funding rounds. It’s a strategic tool to bridge financial gaps, allowing companies to continue their growth trajectory even in less than ideal economic conditions.

Benefits of Venture Debt

There are many advantages to this type of funding. It extends the financial runway, provides a safety net during economic downturns, and allows companies to grow without diluting equity. It’s a win-win, offering companies breathing room to achieve milestones and potentially increase their valuation for future funding rounds.

Introducing our Innovation Term Loan

The Innovation Term Loan stands out by bridging the gap between R&D lending and venture debt. Designed for companies leveraging their R&D tax credits, it offers access to capital over 36 months. This novel financing solution supports your growth with up to 150% of your latest R&D claim available upfront.

What sets the Innovation Term Loan apart are its straightforward fees, fixed payments, and the option for early repayment without penalties. It’s a practical choice for companies looking for predictable financial planning and the flexibility to use R&D tax credits to reduce monthly payments.

Why Choose Non-Dilutive Funding?

Opting for non-dilutive funding like our Innovation Term Loan is a strategic move for preserving equity. It allows companies to fuel growth and navigate financial challenges without compromising on ownership. This approach not only safeguards equity but also establishes a solid foundation for future financing rounds.

SPRK Your Innovation Fund

Consider the Innovation Term Loan as a smart alternative to venture debt for your innovation funding needs. Tailored for tech start-ups and growth companies, it offers a strategic way to access capital while preserving your equity. Get in touch to explore how the Innovation Term Loan can support your business’s growth today.

Accelerating r&d tax credit funds with R&D Advance Loans

Where to Start with Your R&D Tax Credit Application

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Navigating an R&D Tax Credit application can initially appear overwhelming. With a large amount of information and criteria, knowing where to begin is often the biggest hurdle. This guide will break down the process and help you identify the starting point for your application.

What Are R&D Tax Credits?

R&D Tax Credits are a UK government incentive designed to encourage companies to invest in research and development. They offer a valuable source of income to businesses, reducing their tax bill or awarding cash repayments. Qualifying R&D activities can range from developing new products to enhancing existing processes. It’s not just about ‘white coat’ scientific research but also developmental work in design, engineering, and software.

The Benefits of Claiming Tax Credits

  • Financial Boost: You can reclaim up to 33% of your development expenses as a cash rebate or a deduction on your corporation tax.
  • A Market Advantage: Invest in creating new products, services, and systems to stay ahead of the competition.
  • Have Ownership: Fund your innovation without giving up any stake in your business.
  • Easy Access to Funds: Compared to other innovation financing methods like corporate loans or venture capital, R&D Tax Relief is more readily available.
  • Quick processing: Receive your cash rebate or tax deduction as swiftly as 28 days post-filing or even 12 months earlier if you opt for our Advance Funding service.
  • Two-Year Window to Apply: HMRC permits businesses to claim tax credits for R&D activities up to two years past the end of the relevant financial year.

Where to Start

Beginning your R&D Tax Credit application can feel daunting. Start by asking yourself these questions:

  • Are you a UK-registered business that is liable for corporation tax?
  • Is your company working on projects in a field of science or technology and projects and activities that help resolve scientific or technological uncertainties?
  • Is your company working on one or more research and development projects?
  • Were these uncertainties overseen by an expert?

It’s important to note that this isn’t limited to traditional ‘white coat’ scientific research; it also encompasses ‘brown coat’ development activities in fields like design and engineering, where challenging technological issues are addressed.

Qualifying activities span various sectors and can include:

  • Developing innovative software
  • Engineering design projects
  • Pioneering new construction methods
  • Advancing bio-energy and cleantech solutions
  • Exploring novel approaches in agri-food as well as life and health sciences.

If you answer yes to the first set of questions and your project falls under the qualified activities, gather detailed records of the costs involved in these projects. These costs should be:

  • Staff costs
  • Materials
  • Utilities
  • Software

However, costs that cannot be covered by the R&D are:

  • The manufacture and distribution of products and services.
  • Investment in assets under either of the R&D relief schemes isn’t typically covered. Nonetheless, a favourable 100% Research and Development Allowance might be applicable to capital investments like equipment, machinery, and buildings utilised in R&D activities.
  • The expense of acquiring land.
  • Costs related to the utilisation and establishment of patents and trademarks, as these expenses are associated with safeguarding the finalised R&D.

Common Pitfalls to Avoid

A common pitfall is misunderstanding what constitutes R&D. Remember, it’s about seeking advancements and overcoming technological uncertainties. Over-claiming or under-claiming are both detrimental. Ensure your claim is accurate and reflects your genuine R&D activities. Avoid vague descriptions; be specific about the innovations and challenges your project addressed.

Seeking Professional Help

While it’s possible to navigate the R&D Tax Credit process independently, professional advice can be invaluable. Our Innovation Term Loans or R&D Advance loans are a great way to accelerate your innovation funding.

From maximising your claim to needing simple guidance, contact us and make the most of your tax claim.

venture debt

SPRK Capital Announces New Product Launch and Follow-On Capital Raise

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SPRK Capital

SPRK Capital, the leading provider of non-dilutive finance to SMEs in the innovation sector, is excited to announce the launch of the SPRK Innovation Term Loan and the closing of its latest capital raise.

Following the successful £3.5m capital raise in June 2023, SPRK has secured an additional £1.5m to further fund the expansion of its loan book growth, providing support to its senior lending facility, as it launches the new SPRK Innovation Term Loan product.

SPRK currently provides finance to SMEs through its SPRK R&D Advance and SPRK Grant Advance solutions. These funding options help businesses manage their cashflow requirements by advancing both R&D and Grant payments to when they’re needed most… now. SPRK has provided loans and facilities from £50,000 to £10m at the lowest cost available in the innovation lending market.

The new Innovation Term Loan expands SPRK’s market-leading lending propositions to provide a new innovative and flexible funding solution to SMEs engaged in innovation, enabling companies to pre-fund their R&D expenditure.

The SPRK Innovation Term Loan lends up to 150% of a company’s most recent R&D claim through a fixed rate, fixed term, amortising loan, enabling access to growth capital to power UK-led innovation. With founder friendly terms and no dilution, this new product seeks to fill the funding gap between traditional shorter-term R&D lending and dilutive, longer term Venture Debt.

Companies make one fixed monthly repayment through the life of the loan and make automatic overpayments, without fees, from their R&D tax credits, helping them plan and invest in growth.

Dominick Peasley, CEO SPRK said, “The Government is committed to making the UK a science superpower. Access to capital for companies engaged in UK-led innovation continues to constrict these growth targets.

The launch of the SPRK Innovation Term Loan looks to address the issues that growing companies have with access to affordable growth finance. For the first time, SMEs engaged in innovation have access to non-dilutive debt finance over a 36-month term, enabling them to plan their R&D effectively with certainty of finance.

We’ve seen an incredible amount of demand for this funding solution and we continue to receive the unwavering support of our investors, debt providers, and trusted advisors and accountancy firm partners as we introduce this groundbreaking offering to the market.”

 

About SPRK:

SPRK provides SMEs engaged in UK-led innovation the ability to release capital from their eligible R&D and Grant spend using its proprietary online platform, ensuring credit decisions are made swiftly with certainty of funding.

Providing loans and facilities of up to £10m+, SPRK’s unique proposition is designed to optimise cashflow for borrowers through a non-dilutionary source of capital with market leading founder-friendly terms.

SPRK offers the ability for companies to borrow against their eligible R&D spend at any point in their financial year, fund their future investment in innovation and advance fund their innovation grant expenditure.

SPRK’s investment in technology combined with institutional funding enables it to remain at the forefront of UK-led innovation finance.

 

Enquiries:

Sprk Capital
Dominick Peasley, CEO
T: 0800 0025 100
www.sprkcapital.co.uk

Interested in finding out more about how SPRK could benefit your business?
We’re local and always keen to connect and discuss how we can help you meet the needs of your business.

R&D Tax Credits

The Hidden Challenges of R&D Tax Credits and Grants

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There is a myth that it’s not possible for one business to benefit from both R&D tax credits and grants. The reality is that these two funding sources actually have different purposes and are designed to provide a different type of support. As a result, they can work really well in tandem. However, if your business is looking to benefit from R&D tax credits and grants then there are some hidden challenges that it’s important to be aware of.

How do Grants and R&D Tax Credits Work?

  • Grants. A type of funding that can be used to offset the costs of projects that are in the pipeline. Usually, grants are made available where there is a particularly innovative product of service being designed and created. Grants are usually applied for in advance. The funding can often be accessed more quickly with a Grant Advance Loan.
  • R&D tax credits. A much broader spectrum of funding that is intended to be available to any business that is carrying out research and development. There is no requirement for that research and development to result in commercial success for R&D tax credits eligibility. The tax credits are claimed retrospectively.

Is it Possible to get Both?

If your business is eligible then yes it’s entirely possible to benefit from both a grant and R&D tax credits. However, it’s important to note that one can affect eligibility for the other in certain circumstances. What’s really key to have clarity on here is whether a grant you’re applying for (or have applied for) is classified as notified state aid. Because, where that’s the case, this excludes a claim under the SME R&D tax credits scheme. An R&D tax credit claim could still be made if the grant received was project specific. However, this would need to be made under the RDEC scheme, which is the less lucrative of the two.

What are the Hidden Challenges of R&D Tax Credits and Grants?

● Making the right applications. The first, and most obvious, challenge is to ensure that you’re not applying for a grant that could mean your business isn’t eligible to make an R&D tax credit claim under the SME scheme as a result. Whether a grant counts as notifiable state aid can be a complex area and it’s important to make sure you get the right advice so that you’re able to secure the funding that your business needs. If you’re not sure where you stand, it’s always best to seek expert advice.
● The timing of funds received. The second challenge is to ensure that the funding you received is being paid into your business at a time that will be beneficial. Grants are applied for in advance of the project beginning while R&D tax credits are paid out retrospectively. Getting the timing right on this can be critical to ensuring that you have the cash flow you need, when you need it. A Grant Advance Loan can be a simple way to solve this problem, as it allows for a proportion of the future funding to be paid to your business now.

Utilise Advance Funding

Grant funding and R&D tax credits have a lot to offer any innovative business. Hidden challenges exist but can simple to solve. Solutions such as SPRK’s R&D tax credit loan, or Innovation Term Loans can enable greater access to capital. Get in touch, and not only can you get assistance from our trusted advisors, but you can learn more about easing cash flow struggles with our R&D advance funding.

 

 

r&d tax credit loans

Are you eligible for R&D Tax Credit Loans?

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R&D tax credit is a UK government initiative that is designed to encourage innovation – and reward those companies that are investing in it. R&D tax credit loans help your business’s cash flow by providing greater levels of control/access to this capital. Rather than waiting for cash to be received as part of this process, R&D tax credit loans provide an upfront advance so that this can be accessed now.

How to Claim R&D Tax Relief

R&D tax relief is claimed through the process of submitting a corporation tax return on behalf of the company at the end of the financial year. It’s possible to still make a claim up to two years after the end of the financial period that the claim relates to. Once the claim has been agreed by HMRC then the process of delivering the funds can be started.

How can you get R&D Tax Credit Loans?

Your business will need to be eligible for R&D tax credits. This type of tax relief is generally available to businesses that are carrying out innovative activities that are designed to develop new products or services – or enhance existing ones. Success with R&D tax credits requires that an activity is part of a specific project that is focused on science or technology and that its goal is to try and create an advance in knowledge or capability that resolves a current uncertainty.

Once you have done this, R&D advance funding can give you greater access to capital on an ad hoc, quarterly, or annual basis – it’s entirely up to you and what works best for your business.

Two key criteria for eligibility

● Activities that qualify. If you’re going to be successful with R&D tax credit loans then the R&D activities that your business is paying for need to be eligible for R&D tax credits. There is a long, and specific, list of the types of activities that this funding is designed to encompass. These include new process creation, research (e.g. discovering the right materials, solutions or requirements), routine analysis, improving current processes or creating an advance, developing and testing new products and prototypes, creating new services that compliment existing capabilities, testing and developing technological advances.
● Costs that qualify. The costs that will be covered by R&D tax credit loans include certain types of expenses that relate to R&D. For example, project management fees are included as well as the staffing costs of any staff that are working on the project. Other costs that qualify include outsourced or external workers – such as contractors or freelancers – the software costs of a project and the materials and utilities that the project has used. It’s worth noting that staff costs are often one of the biggest costs in R&D.

Which industries can apply for R&D Tax Credit Loans?

There is no specific industry requirement and this is not limited to obvious R&D areas like technology. In fact, businesses from any sector can – and have – successfully applied for R&D tax credit loans.

SPRK Capital: We’re here to help

R&D Tax Credit Loans make it easy to access the cash you will receive via R&D tax credits sooner, rather than later. We understand the process can be daunting, so why not reach out to us? Our trusted advisors will get you on the right track towards maximising your business’ financial efficiency.