Finding funding for research and development can be a real challenge. Traditional lenders like banks are fairly restrictive about lending money to SMEs, and this can make it really hard to find monies needed to progress an excellent idea into fruition. According to the British Business Bank, in the UK nearly 100,000 small and medium businesses are turned down for credit each year, to the value of £4 billion. So if you can’t go to a bank to get funding for growth, where can you go? Here are some other ideas for funding research and development to grow your business:

 

Funding for research and development can also be sought from government grants. One such approach is to review the offerings available through Innovate UK, as various innovation grants are available for businesses. Grants are not available for every type of innovation imaginable, and what Innovate UK will fund varies at different times. The grants are won by entering funding competitions. The funding offered is used to test the feasibility of ideas, research and develop them and demonstrate them into prototypes. At the time of writing, Innovate UK funding competitions were being run in the areas of emerging & enabling technologies, infrastructure systems, health & life sciences, and manufacturing & materials. There is no guarantee that you will gain the funding sought, as it depends who you’re up against in the competition, but it is probably worth entering.

One approach that you may not necessarily have thought of for getting research and development funding to grow your business is making sure to claim tax back on funds spent on research and development. Tax incentives are available to help with R&D, as it is in the country’s interests, and there have been links made between the economy and R&D activities. This may be why in July 2016 Theresa May boosted government investment in R&D by £2 billion more by the end of this Parliament. The R&D tax relief scheme in the UK is fairly generous, and from April 2015 the tax relief on allowable R&D costs is 230%. Tax relief is not guaranteed, and you must demonstrate that you are doing R&D as HMRC visualises it, but if you are it is definitely worth claiming the funds back.

 

Crowdfunding is another approach that can be used to gain funding for research and development purposes. There are various different websites to choose from, and one of the best well known is Kickstarter. To date, 117,345 projects have been successfully funded through Kickstarter, with $2.7 billion dollars pledged in total. Funding is not guaranteed through Kickstarter either, and to gain funding you have to be able to tell a good story that engages potential investors. You also have to be willing to give something away, some kind of reward or incentive, in return for the funding. It is possible to successfully gain funding through Kickstarter when partnered with a good social media campaign. Of course, this approach may not be suitable for businesses that are doing something secret and want to keep it that way.

 

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