4.5.1 Table 4.8 shows that just over one-third of all award winners had sought further finance to enable them to take their project outputs to the marketplace; and, in conjunction with Table 4.2, it suggests that no more than half of the firms whose projects had actually led to the marketplace had sought further finance. The table also shows that, the smaller the firm, the more likely it was to have sought further finance.
Table 4.8 Since participating in the scheme, has your firm sought further finance to enable it to introduce any new or improved products, services or systems into the market place that resulted from the project?
Percentage (%)
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/ excep 1-9 10-49 50+ Smart GRD Yes 36 29 37 38 40 24 13 36 36 No 62 68 62 59 59 72 81 62 63 Don't know 2 2 1 3 1 4 6 1 2
Effective Sample Size 461 76 236 155 326 94 20 269 211
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q36)
4.5.2 Table 4.9 shows the sources of further funding sought, offered and accepted. The first part of the table shows that, most commonly, those seeking further finance looked to their RDA or some other public sector source. Smart award winners were more likely than GRD award winners to look to their RDA or another public source, but they were less likely to specify ‘other’. However, very few of the GRD award winners explained what ‘other’ was. The first part of the table also indicates that venture capital and business angel equity and loan finance were popular.
4.5.3 The second and third parts of Table 4.9 imply that most searches for further finance were successful and that most offers of finance were accepted. For example, 48% of firms seeking further finance to take their project outputs to market looked to their RDA/other public source, 42% actually received offers and 40% accepted offers. 4.5.4 The small proportion of firms that did not accept the further finance offered gave three
main reasons for doing so, ie: the funding was too risky; the terms were unsatisfactory; and not enough money was offered.
Table 4.9 (if further finance sought to introduce products / services to the market) What type(s) of further finance have you applied for / been offered / accepted.
Percentage (%)
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/ excep
1-9 10-49 50+ Smart GRD Finance sought
Other RDA / public sector funding 48 36 52 47 47 59 46 54 36
Other(s) 19 31 16 18 18 19 4 14 28
Venture capital equity/share finance 11 8 12 10 11 5 4 10 13
Bank loan 8 13 4 11 8 5 45 6 10
Business angel equity /share capital 8 6 7 11 10 2 0 9 7
Venture capital finance loan 8 8 4 14 8 0 0 6 12
Money from family / friends 5 8 6 3 6 0 0 4 8
Other businesses: equity / share capital 5 1 6 5 4 12 0 6 4
Business angel finance: loan 5 9 5 3 6 0 0 5 5
Effective Sample Size 182 46 89 59 143 25 3 108 82
Offer made
Other RDA / public sector funding 42 34 42 45 41 53 46 46 33
Other(s) 17 25 16 16 17 16 4 13 25
Venture capital equity/share finance 8 4 9 9 8 2 4 7 10
Bank loan 6 10 3 9 5 5 45 5 7
Business angel equity /share capital 6 5 4 10 6 2 0 6 5
Venture capital finance loan 6 3 4 12 7 0 0 4 12
Money from family / friends 5 9 5 3 6 0 0 4 8
Other businesses: equity / share capital 5 1 6 5 4 12 0 6 4
None of the above 15 15 19 7 16 9 0 16 11
Effective Sample Size 177 47 86 60 138 25 3 107 75
Offer accepted
Other RDA / public sector funding 40 34 41 40 38 53 46 44 31
Other(s) 16 25 14 16 16 15 4 11 27
Venture capital equity/share finance 7 3 7 9 7 2 4 6 9
Venture capital finance loan 6 3 3 12 6 0 0 3 12
Money from family / friends 5 9 5 1 6 0 0 4 6
Bank loan 5 8 2 7 4 5 45 4 5
Other businesses: equity / share capital 5 1 6 5 4 12 0 6 4
4.5.5 Generally comparisons with finance sought, offered and accepted over different stages of the project or development capital rather than operating capital (ie when alternative and additional finance was sought) shows that businesses improved their prospects of levering in private sector finance, ie offers made, by funders, and accepted increased over the duration of the project, especially for Venture Capital funds (equity / share finance), bank loans and finance from other businesses where merger or acquisitions may occur.. Generally, the applications made over the project period increases for their forms of capital increases, apart from bank loans, as businesses look for equity holding partners, probably linked to advice through board representation.
Table 4.10 shows that half of the firms that did not seek further finance to take their projects outputs into the marketplace explained that they were able to manage without. The medium sized firms (i.e. with 50+ employees) were more likely than others to say this. Small proportions of firms mentioned difficulties obtaining finance, its cost or its riskiness.
Table 4.10 (If further finance not sought) Why did you not seek further
funding to enable you to undertake your project?
Percentage (%)
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/ excep
1-9 10-49 50+ Smart GRD
Able to manage without other finance 50 52 46 58 47 59 77 51 48
Wanted to stay independent 8 7 8 9 10 4 0 6 11
Difficulties in obtaining finance 7 6 7 7 9 3 1 5 12
Large cost of finance 7 3 12 0 9 5 0 9 4
The funding was too risky 6 1 9 2 7 2 4 6 5
Not aware of any sources of finance 4 3 6 2 4 5 0 5 2
Unsatisfactory terms were likely 4 13 3 0 6 0 0 4 4
Other 29 25 31 26 30 22 24 29 29
Effective Sample Size 244 40 128 83 159 60 14 139 115
Respondents could select more than one option; so percentages in any column may sum to more than 100 A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q39A)
Table 4.11 Which other sources of funding did GRD have most effect
Total (%)
Other RDA / public sector funding 47
Bank overdraft 18
Venture capital finance equity / share capital 18
Bank loan 12
Business angel finance: equity / share capital 12
Venture capital finance loan 12
Money from family / friends 6
Bank loan with Small Firms Loan Guarantee 6
Hire purchase / lease finance 6
Trade credit (from suppliers / customers) 6
Other businesses: equity / share capital 6
Other businesses: loan 6
Business angel finance: loan 6
Respondents could select more than one option; so percentages in any column may sum to more than 100 Source: PACEC Survey (Q15B)
With regard to the type of funding used in conjunction with GRD, where it was used, most businesses said it was important but especially bank overdraft facilities for operating finance (almost all businesses), venture capital and/or business angel equity funds which often included external advice, and other public sector funding. 4.5.6 Table 4.12 indicates that half of the firms, but more Smart award winners than GRD
award winners, thought that being an award winner made no difference to their ability to obtain finance. However, a similar proportion of firms, but GRD award winners especially, thought that being an award winner made it either much or a little easier. Part of this is because the award winners have had to go through an application process to review GRD which acts as a form of due diligence. This can give investors more confidence to invest in the GRD businesses and the project and potentially removes some of the risk.
Table 4.12 What effect do you believe being a GRD award recipient has had on your firm's ability to obtain finance?
Percentage (%)
Type of grant Size of company Scheme Total Micro Feas/
reschDevel/ excep 1-9 10-49 50+ Smart GRD
Made it much easier 16 13 15 18 17 11 20 13 21
Made it a little easier 32 48 25 36 33 31 21 27 43
Made no difference 50 38 57 44 48 56 58 59 34
Made it a little more difficult 1 0 1 1 1 1 0 1 2
Made it much more difficult 1 0 1 1 1 1 0 1 1
Effective Sample Size 437 69 228 146 311 87 19 261 192
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q43)
4.5.7 More than half the award winners, but a larger proportion of Smart award winners than GRD award winners, had not claimed R&D tax credits (Table 4.13). A substantial proportion of award winners were not sure, but of the reminder, there was a roughly even split between those that had claimed credits for their Smart/GRD project and those that had claimed for other projects.
Table 4.13 Has your business claimed R&D tax credits?
Percentage (%)
Type of grant Size of company Scheme Total Micro Feas/
resch Devel/ excep
1-9 10-49 50+ Smart GRD
No 54 61 62 35 62 32 32 58 46
Yes other projects only 18 12 14 29 14 27 39 17 19
Yes including this project 15 10 14 20 13 24 11 12 20
Not sure 13 17 10 16 12 17 18 12 15
Effective Sample Size 452 74 233 150 321 91 20 268 201
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q44)