Short answer
Innovate UK reimburses grant costs after you have spent them, usually through quarterly claims. You pay staff and suppliers first, submit a claim with evidence, then wait for approval and payment. That creates a cash gap of several months on every quarter, and part of the grant may be held back until the project ends. Companies cover it from cash reserves, equity, or finance against the grant itself.
Key facts
- Claims are usually quarterly, in arrears
- Each claim needs a progress report and evidence of spend
- Grant income = eligible spend × your grant rate
- Part of the grant may be retained until the final report is approved
- Check your offer letter for your exact terms
How Innovate UK pays grants
At the start of each quarter you forecast your spend. At the end, you submit a claim showing what you actually spent, with a progress report. Your monitoring officer reviews it, and once approved, Innovate UK pays the grant share of the eligible costs. See how to make an Innovate UK claim.
Illustrative example: the cash gap on a £500,000 grant
Illustrative example. A small company wins a £500,000 grant at a 70% rate on a £714,000 project over two years. It spends about £89,000 a quarter. At the end of quarter one it claims £62,000 (70%), which arrives some weeks later. By then it has spent another £89,000. At any time, it is carrying one to two quarters of spend before reimbursement: up to around £180,000, on top of its own 30% share.
Getting your forecast right
Model grant income as eligible spend × your grant rate, paid one claim cycle after you spend. Leave a margin for slower approval, ineligible costs and any retention at the end. A 10% difference between forecast and actual spend may need explaining to your monitoring officer.
Options to fund the gap
| Option | Pros | Cons |
|---|---|---|
| Cash reserves | No cost | Ties up cash you may need elsewhere |
| Equity | No repayment | Dilution; slow to raise |
| Innovate UK innovation loans | Patient terms | Competitive; separate application |
| Grant advance | Fast; repaid from grant payments | Interest and fees |
How Nighthawk does it
Grants Advance lends up to 80% of your next six months of grant payments, from £30,000 per drawdown, and each drawdown is repaid when the matching claim is paid.
Related questions
How long after a claim does Innovate UK pay?
It varies with how quickly the claim is approved. Check your offer letter and allow several weeks.
Is any of the grant paid up front?
Generally no for standard Innovate UK grants, though some programmes differ. Check your offer letter.