Fuelling Growth Ahead of Reimbursement: R&D Tax Credits and Grant Advances

For R&D tax credits, eligible expenditure is incurred over a 12-month accounting period, with the benefit only realised once the claim is filed after year-end. Similarly, many grants are paid in quarterly arrears, meaning expenses need to be covered upfront before reimbursement.

For many innovative businesses, this creates a funding gap at precisely the moment when resources are most needed. This can make it harder to commit fully to projects, especially when costs are concentrated around:

• Payroll, particularly the hiring of skilled staff essential to the target project.
• Prototyping and testing, where upfront supplier and equipment costs are often due before a single invoice can be reclaimed.
• Matched funding requirements, where a business must prove its ability to invest before unlocking external support.

With the right funding in place, those same costs become opportunities. Extra working capital allows companies to hire more, secure supplier relationships, and invest in prototypes without hesitation. Instead of slowing projects down, arrears-based schemes can work together with advance funding to accelerate progress.

Innovation depends on momentum. A twelve-month lag on R&D repayment or arrears-based grant payments can mean critical decisions are delayed, even if funding is guaranteed further down the line. By aligning liquidity with project timelines, advances make it possible to meet external deadlines for grant matches, pilot programmes, or investor commitments. Delays can limit opportunities; timely funding allows businesses to stay agile, deliver milestones, and position themselves for growth.

How SPRK Advances R&D and Grant Funding

SPRK offers two non-dilutive funding options tailored for innovative SMEs:

• R&D Tax Credit Loans allow businesses to access up to 80% of their estimated tax credit before HMRC repayment, with no upfront cash required, clear fees, and flexible terms that preserve equity while supporting ongoing innovation.
• Grant Advance Funding provides capital against approved grant awards, releasing up to 80% of each quarterly or milestone payment at the start of the period and reducing capital requirements by up to 60%.

Both products are delivered through a straightforward online process, giving businesses advanced working capital to fund salaries, supplier costs, or milestones - keeping projects moving without the wait for reimbursement.

Spotlight: EnSilica and the Role of Advance Funding

The experience of EnSilica highlights how advance funding can transform innovation projects.

EnSilica, an Oxford-based chipmaker, developed the eSi-CRYSTALS, a hardware core integrating three post-quantum cryptography standards (Kyber, Dilithium, SHA-3) into a single efficient IP block. By combining standards, they reduced size, cost, and energy use compared to multi-component designs.

Sprk Capital provided short term bridging funds to EnSilica in 2023 and 2024, giving the company the financial flexibility to accelerate the development and commercialisation of its eSi‑CRYSTALS. That early support helped EnSilica move faster than traditional timelines would allow, securing high-profile satellite contracts and further government funding at a critical stage in their growth.

Tips for Leveraging Advances

If you are planning to claim R&D tax credits or have secured a grant award, these steps can help you use advances effectively:

• Map timelines early: Know when large expenses are due, when claims will be filed, and when funds are likely to arrive.
• Document thoroughly: Keep clear records of eligible spend to support smooth claim preparation and advance assessment.
• Apply before cash is stretched: Secure advance funding before projects are in motion, rather than reacting once cash reserves are under pressure.
• Prioritise milestones: Direct advance funding to areas that unlock progress such as hiring, prototyping, or supplier contracts.

Ready to keep projects moving?
SPRK Capital can allow growth before credit repayment for both R&D tax credits and grants. Get in touch today to discuss how advance funding can support your next stage of growth.