Project Funding
FINANCING OF R&D+I PROJECTS
These acronyms correspond to the sum of three concepts:
a) Research: extending scientific knowledge even if it has no practical application, e.g. in services or consumer products.
b) Development: Economic sense for an evolution that leads to better levels of product or business creation.
c) Innovation: Consists of creating something new, or improving what already exists to make it better and more efficient.
In order to encourage both public and private companies to carry out R&D&I projects, there are different tools and incentives, such as, for example:
1. Tax deductions on Corporate Tax that can reach up to 59% of the return on R&D Projects (Research and Development) and up to 12% of returns for tax deductions of 25% of the expenses incurred in the tax period for R&D.
2. Grants and Subsidies. We help you to identify the most appropriate aid for your project and your needs and we take care of the management. In this sense, they can be focused on increasing innovation projects, reducing the demand for electricity or environmental pollution or favouring collaboration with other companies.
3. Social Security bonuses for Research Personnel that can reach up to 40%.
NEXT GENERATION EU EUROPEAN FUNDS
In July 2020, the European Council agreed on an exceptional temporary recovery instrument known as Next Generation EU with €750 billion for all Member States. The Recovery Fund ensures a coordinated European response with Member States to address the economic and social consequences of the pandemic.
The funds can be used to provide repayable loans of up to EUR 360 billion and non-repayable transfers of up to EUR 390 billion.
The two largest instruments of the Next Generation EU are the following:
The Recovery and Resilience Mechanism (RRM), which is the core of the Recovery Fund and is endowed with €672.5 billion. It aims to support investment and reforms in Member States to achieve a sustainable and resilient recovery, while promoting the EU's green and digital priorities.
The REACT-EU Fund, is endowed with €47.5 billion. REACT-EU funds operate like structural funds, but with greater flexibility and agility in their implementation. REACT-EU will promote the green, digital and resilient recovery of the economy.
Next Generation EU will also contribute additional funds to other European programmes or funds, such as the European Agricultural Fund for Rural Development (EAFRD) and the Just Transition Fund (FTJ), of which Spain will receive 720 and 450 million euros, respectively.
Within the RRF, Spain will receive a total of approximately ¤140 billion, of which ¤60 billion will be non-refundable transfers. In addition, it will be able to access up to EUR 80 billion in loans.
As for the REACT-EU Fund, Spain will receive just over 12 billion euros for its implementation in the period 2021-22.
START-UP ACCELERATION
We accelerate and help start-ups to boost their financing in the national and international market. Our support programme includes: mentoring, intensive business training, digital education and financial mentoring.
Our collaboration with start-ups includes different stages:
a) Pre-incubation- IDEA PHASE: Strategic planning that includes the preparation and fine-tuning of the business plan of an entrepreneurial project, defining the business model and validating it through a market research process.
b) Incubation - SEED PHASE: This is the phase in which the project is carried out and its real impact is monitored. Objectives are verified and the work models set out in the business plan are developed in a real way by the different areas of the new company such as production, marketing and human resources.
c) Post-Incubation:-EXPANSION PHASE In this stage, the project is monitored and areas of opportunity are strengthened. It is a very important period for the consolidation of the start-up. This phase is suitable for both national and international financing rounds.
ALTERNATIVE FINANCING
The collaborative economy and, above all, the internet, are allowing the realisation of many projects thanks to the investments of individuals, loans or donations in exchange for shares in the company, an interest, a product, there are many and varied formulas.
Some of the possible alternatives:
1. Crowdfunding
Crowdfunding is a financing formula that allows a large and diverse group of people to obtain funding without having to ask for money from a bank or other financial institution.
The main objective of crowdfunding is to get many people to give you one euro instead of looking for a single financial institution to lend you everything you need to develop a project or an idea.
Crowdfunding works through online platforms that connect entrepreneurs with investors. The basis of it all is transparency. Those who need funding publish their project on the platform indicating the amount of money they need and the rewards that those who invest will receive. These rewards range from shares in the company, exclusive material, to recognition. Investors choose the projects they want to invest in and the platform is responsible for delivering the proceeds to the entrepreneur.
If you are going to seek funding on crowdfunding platforms, we recommend that you convey confidence and be realistic because investors are looking for feasible projects. But the most important thing is that you spread your idea well. It is not enough to create your project on the platform and wait for the money to arrive. If you want to succeed, promote your campaign. Take advantage of the potential of the Internet and social networks.
2. Direct lending
Finally, let's talk about direct lending. This alternative financing model, as well as crowdlending, are variants of fintech.
Fintechs are companies that use their technological base to make financial services available to entrepreneurs and individuals in a much more accessible and simpler way than traditional banks. They offer a variety of financial products and services such as:
- Payment and transaction services (PayPal is the most successful example).
- Personal finance management.
- Investment consultancy and crowdlending and direct lending financing platforms.
Direct lending is a form of direct financing to the company. They are made up of investment funds that grant loans to companies with the aim of obtaining a return.
The main advantage of this form of financing is its flexibility, as they are not subject to banking regulations, which allows them to obtain the money more quickly.