Innovation Credit: Conditions

General criteria

Your project must meet the following 11 criteria to be eligible for the Innovation Credit:

• Be innovative. Your project must involve the technical development of new products, processes, or services that are new to the Netherlands and have good market prospects. The technology must be new to the Netherlands. If another Dutch company offers a similar technology, that technology may not qualify. But is the process different? Then it is new and qualifies for Innovation Credit.
• Have sufficiently substantial technical or clinical risks. There is a possibility that the project will fail due to a technical risks. The project must have no other risks, such as financial or commercial risks. Demonstrating the technical risk is a focus during the application process. Describe this risk as well as possible in the plans.
• Be part of a company based in the Netherlands. To be eligible for the Innovation Credit, a significant part of the activities must take place in the Netherlands.
• Result in a marketable product, process or service. Within 5 years, your product, process or service will make a positive contribution to the Dutch economy. It is important that the minimum specifications for a marketable product are known in advance. The customer's value is central in this regard. Preferably, validate these specifications through representative customer interviews. Market readiness may also refer to a commercial outcome, such as a partnership or licensing agreement that enables you to repay the Innovation Credit.
• Offer a market advantage with a great perspective. This market advantage must be quantitatively substantiated and must allow for the inclusion of any deals made at the end of the project.
• Be able to show a good degree of technical feasibility. This is also known as Proof of Principle, based on previous research. As a result, the hurdles and technical risks associated with it are largely known.
• Contain one concrete development path. This development path will result in a new product, process, or service (including software, IT, and AI projects). You must demonstrate that the solution can start working, but that development is still needed.
• Have the correct documentation. At the start of the application, you are not required to submit signed financing documentation regarding your own contribution to the project financing. However, at that stage, we do expect an (unsigned) term sheet or other documentation showing which parties you are in discussions with. Please also specify the amounts and form of financing involved. Upon granting the Innovation Credit, the financing documentation must be finalised.
• Have the scope to handle setbacks or delays. Reservations for setbacks are not eligible.
• Have a minimum scope of €150,000. There is no maximum scope for technical and clinical projects, but the maximum contribution from the Innovation Credit is €10 and €5 million, respectively.

Additional conditions for preclinical drug development

When assessing a preclinical drug development project, the advisers and advisory committee will determine whether the project has progressed sufficiently to qualify for the Innovation Credit. In doing so, they will consider the following criteria, among others:

Terms and conditions of the loan

Once the project is completed, you will have to repay the Innovation Credit. You have to repay the loaned credit amount plus a remuneration. This remuneration consists of:

• A one-off fixed markup on the loaned amount. For technical projects, this markup amounts to 15% and for clinical projects, 25%. You will not pay interest over this markup.
• Annual interest. Interest begins the moment you receive funds from the Netherlands Enterprise Agency. Next, the interest is calculated on the credit amount you are set to receive and increases annually until the credit amount is repaid in full. The compound interest rate is set to 3.0%.

Rules for repayment of the Innovation Credit

Certain rules apply when repaying the Innovation Credit. Have you received a subsidy for your project through another scheme? Then we will reduce the Innovation Credit based on this amount. In addition, no loans can be repaid to shareholders until the Innovation Credit has been repaid in full.  

Reporting and final report

During the project, you will frequently report on progress to ensure your credit payments continue. The credit payments are linked to the milestones, as stated during the application process. Please note: the credit payments are spread out across each quarter of the project period in question.

After the project has been completed, you must submit a final report. This final report must also include an audit report as completed by an accountant. You will have to bear the costs for this. For the duration of the credit, you will be required to send annual financial statements to the Netherlands Enterprise Agency.

Pledge agreement

To obtain the credit, you will be required to sign a pledge agreement with the Netherlands Enterprise Agency. This gives the Netherlands Enterprise Agency 1^st lien on all tangible and intangible assets involved in the project. Examples include patent rights, copyrights (such as source code or other technical documentation), other intellectual property rights, machinery and inventory. We establish a pledge only on assets owned by a legal entity (in principle, the applicant for the innovation credit). We consider which of the applicant's assets should be pledged for each application.

The right of pledge applies to assets that:

• already exist and are used in the project;
• arise in the context of the project;
• arise after the project period in the context of continued development and from the project.

The Netherlands Enterprise Agency has the 1^st lien until you have met one of the following conditions:

• You have repaid the Innovation Credit in full (including the principal amount, interest and markup); or
• Your company is fully exempt from repaying the Innovation Credit.

More information

• Read more about the attachments to your application.
• Read how the application process works.
• Apply for the Innovation Credit.