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funding

SMART: SCOTLAND

Source: Funding

Fund open for applications: Open

Overview

Support to help small and medium-sized businesses to improve their competitiveness by developing new, highly innovative and commercially viable products and processes to the benefit of the Scottish economy. The programme provides grants on a discretionary basis for technical and commercial feasibility studies, and research and development projects.

SMART: SCOTLAND seeks to achieve its objectives by providing grants on a discretionary basis for:

  • technical and commercial feasibility studies; and
  • research and development (R&D) projects.

The support available is as follows:

  • Technical and Commercial Feasibility Studies

    Support for technical and commercial feasibility studies is available on a discretionary basis at 75% of eligible project costs. Projects must last between six and 18 months and the maximum grant is £100,000. One-third of the grant is paid upfront when the project starts. The remainder of the grant is normally paid quarterly in arrears against claims submitted.

    Feasibility studies should involve early stage R&D, the outcome of which will enable informed decisions on the technical and commercial

    If applicants successfully complete the feasibility study, they may then apply for a research and development grant to enable them to develop a pre-production package.
     
  • Research and Development Projects

    A SMART research and development grant of 35% of eligible project costs, up to a maximum grant of £600,000, is available to SMEs on a discretionary basis to enable them to develop a pre-production prototype of a new product or process. Grant assistance is normally paid quarterly in arrears against claims submitted. Projects must last between six and 36 months, and have minimum eligible costs of £75,000.

    The development of commercially usable prototypes and pilot projects can also be assisted where the prototype is necessarily the final commercial product and where it is too expensive to produce for it to be used only for demonstration and validation purposes. In such cases, any revenue generated from the prototype or pilot would require to be repaid on a pro-rata basis.

    Any SME that meets the SMART:SCOTLAND eligibility criteria may apply for a SMART R&D grant, irrespective of whether or not they receive support under SMART for a feasibility study.
     
  • SMART Awards

    All feasibility studies and research and development projects that receive SMART grants will be considered for a SMART Award. These Awards will be made in recognition of projects that demonstrate exceptional technical merit and commercial potential. Winning firms will be presented with their awards at an annual awards ceremony designed to showcase them to the business and financial investment communities.

Eligibility

Individuals planning to set up a business and small and medium-sized enterprises (SMEs) are eligible to apply to the programme, provided they are based in Scotland or planning to set up in Scotland. SMEs must meet the European Community definition of a small to medium-sized enterprise and have:

  • fewer than 250 employees (full-time equivalent world-wide, including partners and executive directors); and
  • an annual turnover not exceeding €50 million; and/or
  • an annual balance sheet total not exceeding €43 million.

SMART: SCOTLAND actively encourages entries from companies established by universities or non-profit research centres in which the institution retains a shareholding. Such companies are eligible to apply for a SMART grant as long as:

  • one of the purposes of the company is the development of products or processes for commercial exploitation, and the company does not merely act as a clearing house for R&D contracts for the university or research centre; and
  • the company meets the other qualifying criteria for SMART: SCOTLAND.

The university or research centre should normally have a shareholding of 33% or less. If more than one university or research centre has a shareholding in the company, their combined shareholdings should normally not exceed 33% of the company's share capital.

Organiser

Scottish Enterprise

Min Employees

1

Max Employees

50

Extended Description

SMART: SCOTLAND is a single company R&D support scheme provided by Scottish Enterprise with part-funding through the European Regional Development Fund (ERDF). The scheme is aimed at supporting the significant development of technologies of interest based on the technological, IP, financial and commercial aspects of proposed projects, as well as the management expertise of the business.

The aims of SMART: SCOTLAND are to:

  • Assist small and medium-sized enterprises (SMEs) to research, develop and exploit new technologically innovative products with good commercial potential.
  • Stimulate technical innovation and encourage best practice.
  • Strengthen the scientific and technological bases of industry.
  • Improve the future competitiveness of the Scottish economy by supporting technically innovative SMEs and their capacity for wealth creation, employment and export sales.
  • Contribute to a climate which encourages investment in innovative technology by individuals, companies and financial institutions and which stimulates a market in technological advancement.

There is no limit on the number of awards that are made each year. However, to obtain an award, projects must be highly innovative from a technical viewpoint and be commercially and financially viable. Individuals who are successful in the competition must establish a business in Scotland before an award can be made.

Restrictions

Charities, companies limited by guarantee awarded charitable status for tax purposes, trade/business associations and research and technology organisations are not eligible for support. As SMART is a single-company support scheme, joint venture or collaborative projects cannot be supported.

The following are excluded from eligible costs:

  • VAT (unless the business is not registered for VAT).
  • Contributions 'in-kind'.
  • Inflation and contingency allowances expressed as an arbitrary overall addition to project costs.
  • The cost of preparing a SMART application.
  • Work undertaken before the start of the project and after the end of the project.
  • Posts funded by RSA or expenditure included in other publicly-funded projects.
  • Salary costs above an annual full-time equivalent of £40,000 per person.
  • Directors' fees charged as consultants or sub-contractors to their own business above an annual full-time equivalent fee of £40,000 per person.
  • Salary and other related costs for staff that are based outwith the EU Member States.
  • Interest charges.
  • Bad debts.
  • The purchase of land and buildings.
  • Profit earned by a subsidiary or related enterprise or person(s) in providing materials, sub-contracting, consultancy or trials/testing.
  • Consultancy and sub-contract work undertaken outwith the EU Member States comprising more than 20% of the eligible project costs.
  • The cost of printing operating, service and maintenance manuals.
  • The cost of licensing in background intellectual property when the intellectual property is being licensed from a subsidiary or related enterprise or person(s).
  • Marketing and sales costs.
  • Market research and market survey costs.
  • Training costs related to sales or distribution of the developed product/process.
  • Accountancy costs that are not specific to the project.
  • Capital equipment and tooling for manufacturing production.
  • Interest and service charges arising from hire purchase, leasing or credit arrangements.
  • Dividends.
  • Advertising and entertaining.
  • Certification fees.
  • Defence projects.

In addition, support will not be provided for projects which will have an adverse effect on the environment and/or society.

Eligible Expenditure

All costs properly incurred and defrayed on the project are eligible for support, including:

  • labour;
  • overheads;
  • materials;
  • consultancy fees;
  • sub-contract charges;
  • fees for trials and testing;
  • preparing draft operating;
  • service and maintenance manuals;
  • intellectual property costs;
  • market assessment;
  • training;
  • the net cost of capital equipment; and
  • some accountancy, travel and subsistence fees.

Both feasibility studies and research and development projects must involve a significant technological advance for the UK industry or sector at which the product or process is targeted. Significant technology risks should be associated with the technology challenge.

Most technologies are eligible and applications from traditional industries and hi-tech businesses are equally welcome.  However, the programme does not support defence projects. Certain industry sectors have restrictions on State Aid for R&D under the provisions of the Treaty of Rome (Articles 92 and 93). The industries currently affected include shipbuilding and transport.

How to Apply

Deadline(s):

Applications may be made at any time.

Frequency: Ongoing programme.

Link to guidelines:

http://www.scottish-enterprise.com/services/develop-new-products-and-services/smart-scotland/overview

Useful information:

Applicants are invited to submit an enquiry form to Scottish Enterprise in the first instance.

Full applications will need to include:

  • the completed application form which is used as a quick check on eligibility and the suitability of the project;
  • a separate project proposal which is used as the main focus for assessment of the technical and commercial objectives;
  • a business plan which is used to assess where the project fits in to the business strategy; and
  • recent accounts to assess the strength of the business, the viability of the project and the need for grant.

A project proposal must provide sufficient information on which to base an assessment.

The full proposal should be brief and consistent with the requirements of the guidance notes. It should distinguish clearly between information and figures relating to the SMART stage of the project and the rest of the business. Details of the rest of the business should be incorporated in the Business Plan. The proposal should be written in clear terms so that the officer responsible for appraising it, who may not be familiar with the technology and will need to refer to other sources, can understand it. Where material such as drawings, flow diagrams etc would improve clarity they should be used. These and other supplementary information (such as supporting material from banks, patent applications etc) should be included as annexes.

Applicants are encouraged to contact the Scottish Government at an early stage as an initial discussion of the project may save time or unnecessary work. Applicants will then be assigned a case officer who will guide them through the whole process, from application to approval.

Each application is subjected to a detailed appraisal by officials from the Scottish Government as soon as it is received. Provided that applications meet basic eligibility criteria, intensive due diligence from expert technical, commercial and financial assessors will be commissioned.

The Scottish Government has established links with a broad range of technical experts to assist with this process.

A world-wide patent search will also be commissioned from the UK Intellectual Property Office to assess the level of innovation in the project and to ensure that it does not infringe anyone else's intellectual property.

The result of applications will be notified as soon as a decision has been taken, which may be up to eight weeks after receipt of a fully completed application. This, however, may take longer, depending on the amount of due diligence which needs to be undertaken during the appraisal process and the time taken by applicants in responding to any queries which may be raised.

Find out more on the Scottish Enterprise website

Evaluation

  1. Applicants need to receive an award offer before they start projects or commit expenditure.
     
  2. To obtain an award, entrants must demonstrate that:
    • the proposed project will represent a significant technological advance for the UK industry or sector concerned;
    • significant technical risks are associated with the technology challenge;
    • they own, or have the rights to exploit, the intellectual property needed to undertake the project. (Note: all intellectual property arising from projects support under SMART must be owned by the business receiving the award);
    • the commercial prospects for the end product or process are good;
    • realistic and effective routes have been identified for realising the commercial potential for the product or process;
    • the necessary management and technical expertise and resources to ensure that the project is brought to a successful conclusion are either available "in-house" or will be bought in;
    • financial assistance under SMART:SCOTLAND is essential; and
    • both the project and the business are financially viable.
       
  3. Account will also be taken of the wider impact or implications of projects to society, eg factors such as environmental impact, sustainability, and health and safety.
     
  4. The value of the de minimis aid received under the Exploitation Assistance is unlikely to exceed £7,500, although this will vary between projects. The exact figure will be set out in the grant offer letter. This service is provided free of charge to those businesses which will not breach the EUR 200,000 rolling three-year de minimis aid limit by accepting the offer. (Applicants that have previously received de minimis aid from the Scottish Executive, Scottish Enterprise, Highlands and Islands Enterprise or any other public body will have been advised of this by the public body that offered the funding.) If applicants are required to pay part of the cost of this service because the de minimis aid limit would be breached, the Scottish Government will still offer the service, which may be declined.
     
  5. The Scottish Government reserves the right to rescind the decision to offer a grant or reclaim the grant if any information provided turns out to be materially untrue, if applicants do not inform the Government promptly of material changes in their plans, or if they fail to comply with the terms and conditions of the grant offer.
     
  6. A Monitoring Officer will be appointed to projects and will make occasional visits to oversee progress and to ensure compliance with the conditions attached to the offer of grant. Arrangements for monitoring progress will be set out in the offer letter.

Further Information

Find out more on the Scottish Enterprise website
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Last updated: 19 May 2015