If your company has been selected for an EIC grant, you may be wondering how payments are scheduled, when exactly you get the money and what you need to do to receive it. Let us explain.
How does it work?
A special feature of the EIC Accelerator is that funding is provided in the form of mixed support, combining a grant component and an equity component.
The grant is non-refundable and can reach up to €2.5 million.
For the company to maintain a positive cash-flow, the Grant Agreement (GA) normally sets three tranches: 2 pre-financing payments paid within the project lifetime, and a third final payment of the balance paid after the end of the project, if all conditions are met.
Payments – timeline and thresholds
The first pre-financing payment occurs just before or shortly after the start of the project, and it is normally 45% of the total grant awarded.
Additionally, 5% of the grant amount is transferred to the Mutual Insurance Mechanism (MIM) where it is retained until the end of the project and then returned to the company as a part of the balance (final) payment.
MIM is an insurance mechanism created to secure possible defaults in payment. Read our article about the MIM here.
The second pre-financing is paid no later than 2 months after the submission of the periodic report, which is normally scheduled at mid-project.
For projects typically lasting 24 months, the second pre-financing should be released no later than month 15.
The second payment can be at most 40% of the grant amount provided that at least 70% of the first pre-financing (incl. amount retained on MIM) has been used. If the company has used less than 70% of the first pre-financing, the amount of the second payment will be reduced.
The final payment (payment of the balance) is transferred after approval of the final reports. The final payment is calculated as the total grant amount (based on eligible costs) minus the amount already paid by the EIC in the two pre-financing payments.
The total payment is limited to the maximum EU contribution agreed in the Grant Agreement. If the total amount already paid is higher than the agreed contribution, the EIC will recover the difference.
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