Research & Innovation - Participant Portal H2020 Online Manual

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SME instrument

Businesses can now get EU funding and support for innovation projects that will help them develop and expand into other countries – in Europe and beyond.

The funding is available through the SME Instrument, part of the EU's Horizon 2020 programme.

What support is available?

The SME Instrument offers small and medium-sized businesses:

To qualify for funding or other support, a project must fit one of the current bottom-up SME Instrument topics.

Who can get it?

The SME Instrument is for businesses that come under the definition of "small and medium-sized enterprises" (SMEs). To count as an SME, your organisation must be engaged in an economic activity and must have:

  • fewer than 250 employees
  • and
  • an annual turnover of no more than € 50 million and/or a balance sheet of no more than € 43 million

Whether you count as an SME may depend on how you count your workforce, turnover or balance sheet. Please note that you must take account of any relationships you have with other enterprises. Depending on the category in which your enterprise fits, you may then need to add some, or all of the data. For more details: Regulation 2003/361/EC – see "Annex" for a full definition of an SME.

SMEs intending to submit a proposal for the SME instrument must register their SME status in the Beneficiary Register on the Participant Portal by completing an SME self-assessment questionnaire guiding the applicant through the EU SME definition.

More on eligibility...

Phased support

Concept and feasibility assessment (phase 1)

Funding is available for: exploring and assessing the technical feasibility and commercial potential of a breakthrough innovation in your industry.

For example, this could be a risk assessment, market study or intellectual property management of a new product, service, or a new application of existing technologies.

The project should be aligned with your business strategy.

Amount of funding: lump sum of €50 000 (per project, not per participating business) – 70% of the notional eligible costs of €71 429.

Duration: around 6 months, but could be shorter or longer.

What to submit when applying: description of the overall innovation idea and an initial business plan as well as the description of the activities to be undertaken under phase1, based on the phase 1 submission template.

Outcome: The outcome of a phase 1 project is a feasibility report, including a more elaborated business plan.

  • The feasibility assessment might conclude that it is not worth proceeding with a phase 2 project because, for example, solutions already exist on the market or buying in know-how or IPR could solve the problem
  • If the feasibility assessment concludes that an innovation project is needed or that your business needs private funding, you can apply for support for a phase 2 project and/or seek access to private finance, for example under the financial instrument facilities supported under Horizon 2020.

Innovation project (phase 2)

Funding is available for: innovation projects underpinned by a strategic business plan and feasibility assessment (which can be – but need not be – developed through a phase 1 project funded through the SME Instrument).

(In exceptional cases, funding may sometimes be available for projects that are more about research than innovation. This will always be specified in the relevant call topic.)

Amount of funding: usually in the order of €500 000-€2.5 million, but could also be other amounts (covering up to 70% of eligible costs, or 100% if the project has a strong research component and 100% is specifically foreseen in the Work Programme). For more details, see topic descriptions by clicking on a topic on the SME Instrument topic page.

Duration: usually around 1-2 years, unless you request a longer period.

What to submit when applying: proposals based on a feasibility assessment and containing a full business plan, backed up by a phase 1 project or other means. See phase 2 submission template.

Outcome:

  • a new idea (product, process, service) that can be launched on the market
  • a business innovation plan incorporating a detailed commercialisation strategy and a plan on how to attract private investors.

The time-to-grant is expected to be six months.

Commercialisation (phase 3)

Investment readiness support, help with accessing risk finance and customers, and Enterprise Europe Network are available to help business commercialising the innovation resulting from phase 2.

Outcome: By the end of phase 3, your business should have placed one or several innovations (product, process, service etc.) on the market, thus boosting its competitiveness and growth.

Coaching

Business innovation coaching is available throughout phases 1 and 2 to:

  • empower SMEs in their efforts and challenges towards successful commercialisation of their innovation
  • reinforce the company's capability to successfully evolve towards its next life cycle stage
  • address aspects such as strategy, organisation, management, financing, resource development.

Amount (per business):

  • up to 3 days coaching during phase 1
  • up to 12 days coaching during phase 2.

No coaching is available during phase 3. But small businesses can get continued support from the EEN network, regionally and nationally.

Outcome: Businesses should be better able to develop (and refine) a growth strategy covering all business aspects.

Eligibility

Support is available to for-profit SMEs (small or medium-sized businesses), individually or as part of a consortium of for-profit SMEs. Other partners – such as research providers or larger companies – can be involved as associates ("third parties"), but they are not eligible for funding.

Businesses outside the EU can get support provided they're based in a Horizon 2020 associated country. SMEs established in other countries can take part in projects as associates ("third parties"), for example as subcontractors, but they're not eligible for funding.

One project/proposal per business at a time. You can't submit a second application under the SME instrument if:

  • you are already taking part in a project (as lead applicant or partner)
  • you are part of a project going through the application process (from phase 1)
  • But you can:
  • submit a second application under the SME instrument if your first application is rejected and
  • apply for funding under the SME instrument even if you are part of another Horizon 2020 project or application outside the SME instrument.

Applying

Your first step should always be to contact the SME National Contact Point or the closest Enterprise Europe Network partner that can give you information and guidance.

In the list of broad SME instrument topics, find the topic that fits your project best (you will need to click on the topics to see the descriptions).

SME registration: Before starting your application, please make sure that your organisation is qualified as an SME:
if your enterprise has not been validated as SME during the last 2 years, the submission system will not allow you to proceed with your application to the SME instrument before you have filled in the SME questionnaire in the Beneficiary Register and the result shows that your enterprise is an SME. The contact person of your enterprise, who has the LEAR (Legal Entity Appointed Representative) role in the Participant Portal, can submit the SME self-assessment. Detailed description of SME self-assessment wizard is available in the IT HOW TO.
Tip: If you have started preparing your proposal in the submission system before having completed the SME self-assessment in the Beneficiary Register, you have to update your PIC data in the proposal submission system after having finalized your SME self-assessment.

You can submit your application for phase 1 or phase 2 at any time. The SME Instrument is managed as a permanently open call with – in general – four cut-off dates per year. To speed up the process, it's best not to submit proposals very close to the cut-off dates. Your application will be evaluated as soon as it submitted.

Time-to-grant should be about three months after the next cut-off date for phase 1 and six months after the next cut-off date for phase 2 (Cut-off dates for 2014 and 2015 are included in the Horizon 2020 work programme on innovation in SMEs).

Evaluation of proposals

Your proposal will be evaluated by independent external experts directly after submission. The Agency will verify that no conflicts of interest can occur before a proposal is allocated to experts. Moreover, in your proposal application, you are entitled to name up to three experts and their affiliation that should not evaluate your proposal for potential competitive reasons.

Your proposal will be evaluated against the award criteria 1) impact, 2) excellence, and 3) quality and efficiency of implementation. For each criterion, your proposal will be given scores of 0 to 5. In order to be considered for funding, your proposal must score above certain thresholds. If the proposal fails to achieve the threshold for a criterion, the evaluation will be stopped:

  • For phase 1 the threshold for individual criteria is 4. The overall threshold, applying to the sum of the three individual scores, is 13.
  • For phase 2 the threshold for the criterion 'Impact' is 4, and for the other criteria, it is 3. The overall threshold, applying to the sum of the three individual scores, is 12.
  • To determine the final ranking of the proposals, the score for the criteria 'Impact' will be given a weight of 1.5.

The final score of a proposal will be the arithmetic average of the individual scores of the individual evaluators. The experts will also give an opinion on your operational capacity to implement the project and - only in phase 2 of the SME instrument - assess 'best value for money' of subcontracts.

You will receive feed-back on the evaluation outcome within a short time after submitting your application. After the respective cut-off date the Agency will rank the proposals according to the evaluation results. The award of the grants will be made on the basis of this ranking, and the available budget. Consequently, information, whether a project can be funded, can only be communicated after the cut-off date.

Grant preparation and signature

Once you have been communicated that your project can be funded, the Grant preparation stage commences. You will be asked to provide certain data in order to prepare the Grant Agreement (e.g. bank account, legal representative).
For the grant signature the general rules apply.

Pre-financing

     
  • Phase 1: 40% of the total amount of the grant.
    The amount of the grant is fixed at EUR 50 000. The pre-financing will thus be EUR 20 000. The Guarantee Fund will retain 5% of the total amount of the grant, i.e. EUR 2 500. Therefore, the advance payment to the beneficiary will be EUR 17 500.
  • Phase 2: The pre-financing will be fixed in the individual grant agreement.
    There is no standard amount or percentage of pre-financing. As an indication, the pre-financing may cover the costs up to the first reporting period for projects with at least two reporting periods. It will be less for projects that foresee only one report at the end.

Reference documents