Evaluation of Innovation Loans

Following an announcement at the 2015 Spending Review, the UK Government is to introduce new innovation finance products to support innovation. Innovate UK worked with the Department for Business, Energy and Industrial Strategy (BEIS) and other partners to develop a new repayable finance product - innovation loans - with the combined objective of bridging the funding gap for innovative businesses whilst also providing value for money for the taxpayer. Government funded loans for innovation are new to the UK and therefore Innovate UK is running a pilot programme over two years to the end of 2019. A total of up to £50 million is available for business innovation projects, with UK small or medium-sized enterprises (SMEs) able to borrow between £100,000 and £1 million. Through the pilot, innovation loans will be offered through competitions to SME that want to scale up and grow by developing new or improved products, processes or services. The innovation loans can be used for late-stage research and development (R&D) projects that have a clear route to commercialisation.

By the end of 2018, Innovate UK had committed over £15 million of innovation loans to 24 companies, and a further £26 million in conditional commitments to 36 businesses currently progressing through documentation. An additional 100 applications are being considered by Innovate UK.

SQW produced the 'scoping pilot and impact evaluations of the new innovation finance products' report for BEIS in 2017. SQW, working with BMG Research and Middlesex University, were subsequently commissioned by Innovate UK to undertake the interim evaluation of the innovation loans pilot programme. The work aims to evaluate the delivery of the innovation loans programme and the extent to which any early outcomes occur as a result of innovation loans. The initial findings will be reported to Innovate UK in 2019 and will help to refine the programme to better achieve policy objectives during any wider roll out.