What Is Match Funding? The Share a Business Grant Expects You to Find

A small company offered a 70% grant on a £100,000 project still has to find £30,000 itself, and it pays the project's bills before the grant arrives. So what is match funding for grants? It is the share of a project's eligible costs that a grant does not cover and that the company funds itself, while the grant pays the rest. The amount turns on three things:

• the scheme's intervention rate, meaning the percentage of eligible costs the grant pays;
• the project's eligible costs, as the scheme defines them;
• the company's contribution, which is the balance.

A grant here means money awarded up front for a project, which is different from a tax relief claimed on a return (Grants, Reliefs and Refunds: What's the Difference for a UK Business? sets out the full distinction). Whether a grant is worth pursuing at all, compared with borrowing outright, is the question Business Grants vs Business Loans: Which Should You Apply For? answers. Here the grant is taken as given and the company's share is priced.

What Is Match Funding for Business Grants?

The answer to what is match funding for grants is the same in every scheme: the funder pays a fixed share of the approved project costs and the company pays everything else. Schemes ask for it because a company that puts in its own money has committed to the project and carries part of its risk.

Schemes state the requirement in one of two ways, and the difference changes the bill:

• As an intervention rate on project costs. Innovate UK publishes rates such as "up to 70%" of eligible costs for small companies (UK subsidies register, scheme SC11274, published 14 March 2025). The company's match is 100% minus that rate.
• As a ratio to the grant. A scheme may ask for match equal to a share of the grant itself. The same register entry requires aligned investment from a selected investor partner of at least the grant amount for feasibility studies and industrial research, and at least twice the grant for experimental development.

Check which form the scheme uses before doing any arithmetic, because 50% of the project and 50% of the grant are different sums.

How Does Match Funding Work?

How does match funding work in practice? The company applies with a costed project, the funder approves an amount of eligible costs and an intervention rate, and the grant offer fixes the maximum grant. The company then spends the money, claims back the grant share of what it has spent and keeps records that prove each cost.

On Innovate UK projects the grant is paid quarterly and in arrears on submission of a claim, for net eligible costs incurred, invoiced and paid in that quarter (Innovate UK grant terms and conditions, September 2025 version, clause 9.3). Innovate UK normally pays within 30 days of a claim unless it needs more information (clause 9.10). Costs must be paid from the company's business bank account, not a personal account or in cash (clause 9.2).

So the company funds its own share for the life of the project, and the grant share for the weeks between paying a supplier and receiving the claim. Innovate UK also retains 10% of the maximum grant value until the project is complete and the final claim, final report and independent accountant's report are in (clause 9.13). How the grant-funded share is treated in a later R&D tax claim is a separate question, covered in Grant Funding and R&D Tax Relief: How Subsidised Projects Are Treated.

Match Funding in the UK: The Schemes That Set the Split

There is no single national ratio for match funding companies UK grant schemes ask for. Each scheme publishes its own intervention rate, and the rate usually varies with the size of the company and the type of work. Regional schemes publish their own ratios too, and How to Find Regional Business Grants in Your Part of the UK covers where those pots sit and how to find them.

Public support to a company is also capped by subsidy control. Minimal financial assistance of up to £315,000 per enterprise, counted across the elapsed part of the current financial year and the two financial years before it, sits outside the subsidy control requirements (Subsidy Control Act 2022, s36(1) and (2)). UKRI's Innovate UK funding rules page states the same £315,000 limit over a rolling three financial year period (UKRI, last updated 12 May 2026). A scheme that awards under this route may cap its grant below that figure, and earlier minimal financial assistance the company received in that period counts towards it.

Intervention Rates by Business Size and Project Stage

The published rates for the Innovate UK Investor Partnership Programme 2025 to 2028 show how a split is set (UK subsidies register, scheme SC11274, published 14 March 2025). Innovate UK Funding: Which Grants Exist and Who Qualifies covers the wider set of competitions behind these figures.

Project type	Micro or small company: grant	Micro or small company: match	Medium company: grant	Medium company: match
Feasibility studies and industrial research	up to 70%	at least 30%	up to 60%	at least 40%
Experimental development	up to 45%	at least 55%	up to 35%	at least 65%

The register entry sets project cost ranges of £50,000 to £300,000 for feasibility studies, £100,000 to £1m for industrial research and £250,000 to £2m for experimental development. Work nearer to market carries a lower rate, so the company's share rises as the project moves towards a product.

How Much Will You Have to Put In? Worked Examples

All match funding examples use the same formula, which is what any match funding calculator runs, with the rate taken from the scheme's own published guidance:

• grant = eligible project cost × intervention rate;
• match = eligible project cost × (100% − intervention rate).

How the scheme states the requirement changes the result on a £20,000 grant:

• If the scheme pays 50% of eligible costs, the project must cost £40,000 (£20,000 ÷ 50%) and the company's match is £40,000 − £20,000 = £20,000.
• If the scheme instead asks for match equal to 50% of the grant, the match is £20,000 × 50% = £10,000 and the project costs £30,000.

A £100,000 Project at a 70% Intervention Rate

A small company runs a £100,000 feasibility study at the 70% rate published for micro and small companies (UK subsidies register, scheme SC11274, published 14 March 2025):

• grant: £100,000 × 70% = £70,000;
• match: £100,000 − £70,000 = £30,000;
• spend over four equal quarters: £100,000 ÷ 4 = £25,000 per quarter;
• grant claimed for the first quarter: £25,000 × 70% = £17,500, paid in arrears after the claim (clause 9.3);
• retention held until completion: £70,000 × 10% = £7,000 (clause 9.13).

The company pays the full £25,000 of first-quarter costs before any grant arrives, and £7,000 of the grant stays with Innovate UK until the final claim and accountant's report are accepted.

Where Match Money Can Come From

How to get match funding comes down to five usual sources:

• Company cash reserves. No interest to pay, provided the company does not need the reserves for working capital during the project.
• A business loan. A term loan or facility drawn for the match. Where a lender offers a government-backed facility, The Growth Guarantee Scheme Explained for UK Small Businesses covers the scheme's terms and eligibility.
• Private investor equity. On the Investor Partnership Programme, investment from a selected investor partner is a condition of the grant itself (UK subsidies register, scheme SC11274, published 14 March 2025).
• Crowdfunding. Equity or reward crowdfunding raised for the project.
• A director's loan. Money the director lends to the company, repaid on agreed terms.

Whether another public grant can count as match varies by scheme, so the scheme's own guidance decides. Innovate UK requires a company to tell it about any other public funding applied for or awarded against the same eligible costs (Innovate UK grant terms and conditions, September 2025 version, clause 16.3).

In-Kind Contributions and What Schemes Accept

What is match funding in kind? It is a contribution made in something other than cash, such as staff or volunteer time, donated materials or pro bono services, valued and counted towards the company's share. Some schemes accept it when it is backed by dated timesheets and a clear valuation method, and business capital grants rarely do.

Innovate UK's terms show how tight the rules can be: labour can be claimed only for employees on PAYE at their normal contracted payroll rates, with time records showing the date, hours, work done and staff member (clause 9.6). A company should assume cash is required unless the scheme's guidance names in-kind contributions as eligible.

Borrowing Your Share: What It Costs

Business borrowing rates UK lenders offer vary with the lender, the product, the security and the company's credit position. For the match plan, a loan changes two things: the project's cost and its cash flow.

A loan-funded match adds interest to the project's cost, and the grant does not pay it. Repayments start from drawdown, while the grant arrives quarterly in arrears (clause 9.3). In the £100,000 example, a company that borrows the £30,000 match is servicing that loan from the first month, while also paying the £25,000 of first-quarter costs before the £17,500 claim is paid. The loan term and drawdown date should be set against the claim calendar, so that repayments do not peak while the company is waiting for a claim or for the £7,000 retention.

Proving Your Match Is in Place Before You Apply

Funders want to see that the company can fund its share before they approve the grant. Innovate UK runs financial viability and eligibility checks on applicants, with lighter checks for minimal financial assistance awards, and cannot fund an organisation it considers to be in financial difficulty (UKRI, Innovate UK funding rules, last updated 12 May 2026).

Before applying, assemble a record of each tranche of match:

• Cash reserves: recent bank statements and management accounts showing the balance is free of other commitments.
• Loan: a facility letter or offer, with its drawdown date.
• Investor equity: a signed term sheet or investment agreement.
• Director's loan: a board minute and the loan terms.

Then read the scheme's own guidance, which for Innovate UK is the UKRI funding rules page (last updated 12 May 2026). Guidance that appears to allow a source does not mean the funder will accept it; only the funder's assessment of the application decides that.

From Match to Borrowing Capacity

Once the match is a pounds figure, set it against what the company can raise. The question becomes how much can my business borrow on top of its existing commitments, and whether that covers the share after the company's cash reserves and any investor money.

In the £100,000 example, a company holding £10,000 of free cash needs the other £20,000 of its £30,000 match from a loan, investor equity or a director's loan. It also needs headroom for the £25,000 of first-quarter costs, paid before the first claim. If the borrowing capacity estimate falls short of that gap, the company can reduce the project's scope, bring in an investor or wait for a scheme with a higher rate. How Much Can My Business Borrow? The Numbers Lenders Actually Use explains the credit figures a lender runs before it sets a limit.

Conclusion and Next Steps

Take the scheme's published intervention rate, work out the match in pounds and add the first quarter's costs that the company pays before any claim. Then run the company's figures through the borrowing capacity calculator on the business funding page to estimate how much can my business borrow, and compare that figure with the part of the match that cash reserves do not cover.