Short answer
Innovate UK grants pay a percentage of eligible project costs, set by your company size and project type, and you fund the rest. That share is your match funding. Most companies use cash, equity or loans. Because the grant itself is paid in arrears, you actually have two cash needs: your own share, and bridging the grant share until each claim is paid.
Key facts
- Match funding = project costs − grant
- The grant rate is set in the competition brief
- Sources: cash, equity, loans, innovation loans
- Two cash needs: your match, and the grant share until it's paid
What match funding is and how the grant rate is set
Each competition brief states the maximum share of eligible costs it will fund, which usually depends on your business size and how close the work is to market. Small businesses doing earlier-stage research usually get a higher share. Whatever the rate, you must show at application how you will fund the rest.
Where companies find match funding
- Cash reserves: simplest, if you have them.
- Equity: many companies raise a round alongside a grant; the grant can strengthen the investment case.
- Loans: including Innovate UK innovation loans for later-stage projects.
- R&D tax credits: cash from earlier R&D claims. See claiming R&D tax credits on a grant-funded project.
The two cash needs
Illustrative example. On a £714,000 project with a 70% grant (£500,000), the company's match is £214,000. But it also has to pay the grant-funded costs before each claim is reimbursed: up to around £180,000 at any time. Its peak cash need can be close to £400,000, even though the grant is worth £500,000.
Related: Grants Advance →
Related questions
Can match funding come from another grant?
Usually not for the same costs. Check the competition rules.
Do I need match funding in the bank before applying?
You must show a credible plan to fund it. Some competitions ask for evidence.