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3 minute read • published in partnership with ABGI

Insight: Funding through the innovation project lifecycle

In this challenging and uncertain economic climate, investing in innovation is an invaluable way for businesses to build resilience. This is, of course, easier said than done at a time when many companies feel that investing precious resources in R&D or innovation isn’t their top priority. Sandy Findlay from ABGI looks at the various opportunities open to manufacturing and engineering businesses.

It is essential to look at the range of opportunities to access the appropriate means of funding at each stage of an innovation project.


There’s a wide variety of mechanisms available to help companies stay innovative and boost competitiveness, starting with grants. These tend to be used to support early-stage projects where the technical challenges are greater, and the risk of failure is highest. InnovateUK offers a wide range of grants: both general innovation grants such as SMART grants, as well as more targeted competitions such as the Future Flight Challenge

For example in the aerospace and defence industries, there are a number of other grant sources to meet the wider needs of aerospace and defence-related innovation projects, including Horizon Europe’s Partnership for Clean Aviation, ATi’s Fly Zero programme, NATEP and DASA.

There are a variety of funding opportunities open to manufacturing and engineering businesses to support innovation projects / Picture: Getty/iStock

Commercial Funding

Commercial Funding is another support mechanism for innovation, ideal for many projects at a more advanced stage and closer to commercialisation.

While commercial funding takes the form of equity investment or loans and does require to be repaid, it also offers more flexibility than grants with fewer conditions attached.

Companies accessing commercial funding must typically provide security against the lending. For early-stage growth companies which lack traditional fixed assets, we are seeing an increasing trend of companies securing loans against their intellectual property such as that created from the development of software or formal IP in the form of patents.

There are also a few equity investors focused on investing in new technology ventures where there is identifiable intellectual property or very obvious market opportunities.

R&D Tax Relief

The UK Government’s R&D tax relief scheme also continues to provide financial benefits to companies investing in innovation to resolve technical uncertainties. While the level of relief will be impacted by use of grants, the benefits of this incentive can often be significant, especially where there has been significant R&D spend.

Patent Box 

Companies which have been fortunate enough to develop intellectual property through an innovation project for which they’ve secured a patent against can also benefit from Patent Box relief. This scheme offers reduced corporation tax on all profits directly attributed to the commercialisation of the patent itself.

ABGI can help

Securing the right funding for your innovation project is vital to its success and your continued investment in R&D. ABGI is here to help.

We can help you:
Review your current funding.
Identify opportunities – existing & new.
Maximise your entitlement.
Accelerate funding into your business.
Be informed when new opportunities emerge.