10 Public Funding Opportunities for your company
There’s a vague feeling among SMEs and startups that EU funding is only for huge complex projects. And that’s false.
European Institutions are well aware that SMEs and startups are the backbone of Europe’s economy and key to economic growth and innovation in the EU.
For this reason, EU supports SMEs and startups competitiveness and innovation, facilitates their access to finance and promotes entrepreneurship, among others. Find out how.
Mapping funding opportunities throughout EU Programmes
EU programmes cover a wide range of aspects and themes and it might be discouraging to try to spot where the opportunities are. Indeed, I’ve been an information researcher specializing in public funding for more than 15 years and, sometimes, it’s also hard for me to keep up to date and not to miss anything. I can guess what happens if you approach this ocean for the first time. I hope this post gives you, at least, first aid directions in a few important aspects.
10 Public Funding Opportunities for SME Innovation
1 SME Instrument
An interesting intersection between SME and innovation funding happens at the SME Instrument (SMEI) from Horizon 2020. With a budget of about € 3 billion over the period 2014–2020, the SMEI aims at internationally oriented SMEs developing ground-breaking innovative ideas in three phases:
- Phase 1 offers business innovation grants, for feasibility assessment, of € 50,000 funding per project (lump sum) of, typically, around 6 months.
- Phase 2 grants innovation development & demonstration purposes included in a strategic business plan. Funding cover up to 70% of eligible costs, ranging from € 500,000 to € 2.5 million.
- Phase 3 focuses on commercialisation and includes no funding but support activities offered through the Enterprise Europe Network (EEN), which also provides optional coaching during phases 1 and 2.
2 Cascade Funding
Horizon 2020 also offers opportunities for SME’s and start-ups innovation through cascade funding (i.e., granted projects by EC which, in turn, distribute part of their budgets as grants or services to third parties). This cascade funding might translate into acceleration (or incubation) activities or in funded experimenting activities to adopt
emerging technologies into innovative services and solutions and test them. The funding amount greatly varies, depending on the project, between € 10.000 and € 250.000.
The EU Finance for Innovators (InnovFin) Programme, managed by EIB Group under Horizon 2020, consists of financial tools covering investments in any phase of R&I by enterprises of any size. These instruments target intermediary financial institutions which, in turn, deliver financing, such as loans and guarantees to innovative businesses, financing of research & development projects and early and start-up phase equity, among the final beneficiaries.
4 Fast Track to Innovation
In addition, for collaborative projects, Horizon 2020 includes Fast Track to Innovation Pilot (FTI), with a € 200 million budget for 2015 and 2016, which provides funding for close-to-market innovation activities in any area of technology or application and which welcome particularly SMEs and first-time industry applicants. Here, consortia must comprise between 3 and 5 entities established in, at least, 3 different Horizon 2020 countries and funding might reach up to 70% (indicative EU contribution per action between €1 and €2 million).
In this same line, Eurostars Programme aims at international innovative projects undertaken by consortia of, at least, 2 research and development-performing SMEs to develop “rapidly marketable innovative products, processes and services”. This joint programme between EUREKA and the EC, with a budget of €1.14 billion for 2014–2020, is co-funded by 36 Eurostars Countries and each country manages their projects in according to the national funding rules. This means eligibility criteria and funding types and amounts are defined for each country. For example, grants to SME might reach up to 60% of eligible costs in Spain, Poland and Denmark.
Microfinance and Social Entrepreneurship (MF/SE) axis of EU Programme for Employment and Social Innovation (EaSI) supports microcredit and microloans (this is, loans below € 25,000) for vulnerable groups and micro-enterprises and social entrepreneurship. In this case, the support aims at selected microcredit providers and social enterprise investors in the EU to increase lending (again, entrepreneurs or social enterprises are not directly financed, but through this intermediaries).
7 Erasmus for Young Entrepreneurs
Erasmus for Young Entrepreneurs is a cross-border exchange programme, under the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME), that allows new entrepreneurs to learn from experienced entrepreneurs in other countries. The financial assistance, (monthly lump sums depending on country of exchange), contributes to travel costs to and from the country of the stay and covers subsistence costs during the visit. For example, monthly financial assistance for Denmark used to be of € 1,000, in Spain of € 830 and in Poland of € 610.
8 Loans and equity
Also under COSME programme, a mention must be made to the Loan Guarantee Facility (LGF) and the Equity Facility for Growth (EFG), which are financial instruments managed by financial intermediaries in each country to improve access to finance for SMEs. Financing or investing conditions and amounts depend on the intermediaries.
And, in the frame of European Structural and Investment Funds (ESIF), the EC has recently launched (July, 2016) a Co-investment Facility to boost investment in start-ups. Under the form of an equity fund managed by a financial intermediary will invest contributions from the ESIF programme into SMEs at seed, start-up, and expansion stage or for the realisation of new projects, penetration of new markets or new developments by existing enterprises.
9 Thematic Programmes
Many other programmes in specific fields encourage the participation of SME such as, for example, Creative Europe (support to the European cultural and creative sectors), Life (for Environment and Climate Action), Connecting Europe Facility (trans-European networks in transport, telecommunications and energy) or Erasmus + (in education, training, youth and sport). In some of these fields, the corresponding financial facilities also exist, for example, the “Financial guarantee facility for the cultural and creative sector” (Creative Europe) and the ”Private Financing for Energy Efficiency Instrument” and the “Natural Capital Financing Facility” (both in Life).
10 Interregional Programmes
Note that, as well, European territorial cooperation programmes, (such as those under Interreg V), might issue calls in which SME can be eligible for funding.
Yes, one of these might be a funding opportunity for you.
As you can see, there are funding or financial opportunities, for individual or consortia’s projects, with a general focus on SMEs or a specific sector focus, for startups or larger projects, and directly or indirectly managed. The decision on which is more suitable for you will mostly depend on the features of your project.
If yours is an individual project whose key feature is innovation and you are looking for funding (non-reimbursable), you might look deeper into SME instrument or cascade funding opportunities but, if you are ready to take part in a consortium, your opportunities might fit better in FTI or Eurostars. And, in any of both cases, it’s worth to check specific programmes if your project is focused on a specific sector.
Should you prefer to obtain financing, rather than researching better the financial instruments available, I suggest you contact with the financial intermediaries in your country to find out if your project fits.
Consider also that programmes offering benefits different from funding, such as Erasmus for Young Entrepreneurs or experimenting facilities in cascade funding opportunities, can be an interesting complement to foster your project further.
For any of these programmes, there is a handful of information resources and, in some cases, national contact point networks you can approach for more information, except maybe for cascade funding, which is still a relatively new funding format. For the moment, if you want to keep up to date about them, I invite you to track our FundingBox collection.