Europe offers several reliable non-dilutive funding routes for startups and scaleups in 2025. This guide compares Horizon Europe, the EIC Accelerator, Innovate UK and national R&D tax credits, with practical eligibility and timeline tips.
What is non-dilutive funding?
Non-dilutive funding is capital you do not exchange for equity. In Europe, the main sources are EU grants, national innovation grants and R&D tax incentives. These typically support research, development and commercialisation while letting founders retain ownership.
Quick comparison table
| Programme | Core eligibility | Typical award size | Application timeline |
| Horizon Europe | Multi-country consortia for most calls, usually at least three legal entities from three different eligible countries including one from an EU Member State | Varies by call, often multi-million euro for collaborative RIA or IA projects | Calls published on the Funding and Tenders Portal with fixed deadlines |
| EIC Accelerator | Single startup or SME can apply, small mid-caps may seek investment only; UK applicants currently grant-only | Up to €2.5m grant, plus €0.5m to €10m investment via the EIC Fund | Short proposal at any time, full proposals at periodic cut-offs |
| Innovate UK | Business-led projects, collaborations encouraged with research organisations where relevant | Competition-specific, from tens of thousands to multi-million pounds; funding rates and eligible costs set by UKRI rules | Rolling programme of competitions with set deadlines; check sector calls currently live |
| National R&D tax credits (example: UK merged scheme and ERIS) | Incorporated firms with qualifying R&D spend; ERIS applies to loss-making R&D-intensive SMEs meeting the intensity threshold | Under the merged RDEC-style scheme the headline credit rate is 20%; ERIS can yield about 27% cash benefit for eligible SMEs | Claimed via Company Tax Return; claim notification may be required within six months; usual filing deadline is two years after period end |
Horizon Europe: collaborative, multi-country grants
What it funds. Research and innovation projects across themes from health to climate. Most actions require international collaboration.
Who can apply. For most calls, at least three independent legal entities from three different eligible countries, with at least one from an EU Member State. Some actions allow single applicants, but collaboration is the default.
Award size and timing. Budgets vary by topic. Many collaborative projects are multi-million euro awards. Opportunities and deadlines are published on the EU Funding and Tenders Portal.
Why choose it. Maximum leverage for deep tech and TRL advancement, plus international partners and market access.
EIC Accelerator: deep-tech route for single applicants
What it funds. High-risk, high-impact innovations with potential to create or disrupt global markets.
Who can apply. Single startups and SMEs. Small mid-caps can apply for investment only. UK applicants are currently eligible for grant-only support.
Award size and timing. Up to €2.5 million grant plus €0.5 million to €10 million in investment through the EIC Fund. The Work Programme sets out open and challenge calls with scheduled cut-offs.
Why choose it. Tailored for commercialisation at TRL 6 to 8 with scale-up capital options and access to Business Acceleration Services.
Innovate UK: national grants for UK-registered businesses
What it funds. Business-led R&D, feasibility and experimental development across sectors. Collaborations with research organisations are common, but a UK business usually leads the project.
Process and timing. Competitions run through the UKRI portal with specific scopes, funding rates and deadlines. Smart Grants have been paused while a new pilot is developed, so focus on active thematic calls such as Energy Catalyst or sector-specific challenges.
Why choose it. Faster timelines than EU consortia, simpler governance, strong fit for UK-centric testbeds and pilots.
National R&D tax credits: predictable, non-dilutive funding for ongoing R&D
United Kingdom overview. From 1 April 2024 the UK operates a merged RDEC-style scheme at a 20% headline credit rate, alongside Enhanced R&D Intensive Support (ERIS) for loss-making SMEs that meet the intensity threshold. ERIS’s mechanics deliver an effective cash benefit of about 27% for qualifying SMEs.
How claims work. Claims are included in the Company Tax Return. First-time or irregular claimants may need to submit a claim notification within six months of the period end, and the standard claim deadline is two years after the end of the accounting period.
Why choose it. Complements grants, improves runway, and can be forecast as part of the financial model. Comparable incentive schemes exist across Europe.
Actionable steps for founders and CFOs
- Map your route. Decide whether a collaborative EU grant, a national grant or an R&D tax claim best fits your timeline and TRL.
- Check eligibility early. For Horizon Europe, confirm consortium minimums and partner countries. For the EIC Accelerator, confirm SME status and whether you need investment or grant-only.
- Plan deadlines backwards. Note EIC cut-offs, Innovate UK competition closes, and tax claim notification and filing dates.
- Evidence impact. Prepare a concise exploitation plan, market validation and KPIs.
- Use expert guidance. See FI Group’s funding advisers’ guidance for competition fit, budgeting and consortium formation.
According to consultancy FI Group, the strongest 2025 applications link technical milestones to measurable commercial outcomes and policy relevance. Teams that align with call objectives, plan credible co-funding, and sequence grants with non-dilutive funding from tax credits tend to outperform peers.
FAQs
1) What counts as non-dilutive funding in Europe?
Grants such as Horizon Europe and the EIC Accelerator, national innovation grants like Innovate UK, and R&D tax credits that reduce tax or provide payable credits.
2) Can a single SME apply to Horizon Europe?
Most Horizon Europe actions require a consortium of at least three eligible organisations. Single-applicant routes exist in limited cases, but collaboration is the norm.
3) How much does the EIC Accelerator fund?
Up to €2.5 million in grants and typically €0.5 million to €10 million in investment through the EIC Fund, with cut-offs published by the Commission.
4) Are Innovate UK Smart Grants available in 2025?
Smart Grants have been paused while a pilot is developed. Other Innovate UK competitions remain active on the UKRI portal.
5) When is the UK R&D tax credit deadline?
The standard deadline is two years after the end of the accounting period, with claim notifications required in some cases within six months of period end.
