EU funding worth €7.75 million will be given to 155 small and medium-sized enterprises from 21 countries, including Israel and Turkey, for innovation studies, it was announced yesterday (24 July).

2,666 businesses applied for the first round of grants under the EU's SME Instrument, submitting a business plan. Spain was the most successful, with 39 proposals selected, followed by the UK with 26, Italy with 20, Germany with 11, and Ireland with ten. Eight non-EU businesses will receive a total of €400,000 in EU money. While Israel (four proposals), Norway (two proposals), and Turkey (two) are not in the EU, they are part of the Horizon 2020 programme.

The SME Instrument is worth €3 billion over seven years and is part of Horizon 2020, the EU's biggest ever research and innovation framework with a seven year budget worth nearly €80 billion.

Projects selected for funding in first wave of grants. [EC]

The EU will also provide three days of business coaching to successful applicants. They can apply for further funding at later stages of the company’s development (see infographic below). The two later phases cover areas such as research and development and commercialisation.

Applicants will be formally notified in August, and publicly announced by the Executive Agency for SMEs, which manages the programme.

Innovative businesses sometimes struggle to get the finance they need to grow, especially after the financial crisis. The EU believes that SMEs and innovations are drivers of growth, jobs, and the economic recovery.

The SME Instrument aims to be a simple and fast way for high-growth business to get investment and support. The focus is on “potentially disruptive” businesses, like the digital music service Spotify, for example, that can revolutionise their market.

The Instrument is aimed at high-growth, SMEs with ambitions of reaching a global market. About 645 projects should be funded in 2014, rising to 670 in 2015. Applications can be submitted at any time but are evaluated four times each year.

European Commissioner for Research, Innovation and Science Máire Geoghegan-Quinn said, "The response to the new SME Instrument is encouraging. There is clearly demand out there for this kind of support. We hope many of the business plans being financed will mature to become real products and services, generating growth and jobs for our economies."

The European Commission and European Investment Bank said earlier this week that banks will be offered €21 billion of EU funding guarantees to encourage lending to small and medium-sized enterprises (SMEs), which don’t have enough collateral to secure loans.

The Commission and EIB also want to encourage banks and other financial intermediaries to lend or provide equity to innovation-driven companies through “InnovFin – EU Finance for Innovators.”

Earlier this week, a new €100 million Fast Track to Innovation (FTI) prize, offering grants to consortiums of three to five organisations who need the money to give promising ideas the last push to get to market, was announced.

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