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Terms and Conditions
- All funding is disbursed against the achievement of pre-agreed milestones. Applicants in receipt of funding will be obliged to submit Milestone Report Forms (in a pre-determined format) at agreed intervals through out the project. These are required to release further disbursements of funds.
- Applicants will be required to submit a Completion Report (in a pre-determined format) when the work has finished. This details final expenditure and will request copies of any relevant invoices of £100 or more and confirms overall achievements.
- After the work has been completed and the ‘project’ has ended, the company must provide copies of financial statements every 6 months (these may be in the form of VAT returns, unaudited financial statements, audited accounts and/or management accounts). Failure to provide any of the information above will lead to the suspension of the award and/or will initiate immediate and full repayment.
- Where FSE considers there has been breach of the Award Letter or inaccurate information is supplied, we may request a full independent audit.
- All IP rights relevant to the innovation, product or service must be owned by the recipient or licensed to the recipient on terms that allow commercial exploitation.
The Finance for Business: Commercialisation Fund is repayable upon the successful commercial exploitation of the idea via a percentage of sales revenue. Repayment terms will be determined on a case-by-case basis, but may be summarised as follows:
- The total amount repayable will be at least 150% (but may be up to 200%) of the funds invested. For example, if £30,000 is approved at 175%, the beneficiary will be expected to re-pay a total of £52,500.
- The level of repayment from gross sales* will be at least 5% (but may be up to 10%) every six months.
- Repayment will commence six months after first revenue but no later than 12 or 24 months (depending on the 'phase' of the project) from the date of the Award Letter. If repayments do not commence within the required timeframe FSE may decide to subscribe for or take an option for equity. Typically this would occur with the consent of the company.
- If a company is subject to a buy-out or cash-rich sale to another organization before repayment is complete, the Fund would receive 3% of the sale proceeds in addition to the amount repayable.
- If a company secures commercial funding (e.g. bank finance, business angels or venture capitalist) of £500,000 or more, it may, with agreement from FSE, repay the award at a discounted rate of 125%, or request the conversion of the investment into equity or it may continue with a re-payment at the agreed percentage of gross sales.
- Repayment is capped at a maximum 7 year period from the date of the Award Letter. No further repayments will be due after the end of the 7 year period.
*Gross sales are defined as all revenues derived from the sale, leasing, or other marketing or commercial exploitation of the business idea, including maintenance and service contracts. In the event that the technology or intellectual property resulting from the project is sold outright at any time during the 7 year period, a sum equal to the total amount repayable should be repaid within 90 days.
