It’s time to get paid! In the H2020 framework, funding is based on reimbursing project costs. In order for the beneficiary to maintain a positive cash-flow, a certain amount is granted at the start and the rest during the course of the project, if all conditions are met.
So how does it work?
It starts with the pre-financing, an upfront payment of about 40-50% made before or shortly after the start of the project. There is only one pre-financing payment during the life of the project, received by the beneficiary within 30 days of the project start date (provided that the GA has been signed before).
Five percent of the pre-financing is transferred directly to the Guarantee Fund to cover financial risks including amounts potentially owed by the beneficiary at the end of project. This amount is returned to the beneficiary as part of the final project payment.
Next come the interim payments, a few months after the end of each reporting period. Interim payments are calculated on the basis of the eligible costs reported in each project period and are subject to review. When approved, the interim payment is made within 90 days of receiving the periodic report.
The final payment (payment of the balance) is transferred after the approval of the final reports. This payment is also made within 90 days of receiving the reports and is calculated as total grant amount (on the basis of eligible costs) minus the amount already paid by the Commission (pre-financing plus interim 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 Commission will recover the difference. Also at this stage, the 5% in the Guarantee Fund is returned to the beneficiary. All payments are made to the SME’s bank account established in the Grant Agreement, using the Euro as currency.
May the balance be ever in your favor!
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