Tech Grants and Funding for West Midlands SMEs in 2025

If you're a small or medium business in the West Midlands looking to invest in technology, there's good news: substantial funding support is available. This guide covers the main grants and funding schemes you should know about.

Why the West Midlands?

The West Midlands is a priority region for government and private investment:

• £2.7 billion tech sector and growing
• West Midlands Combined Authority actively supporting digital growth
• Levelling Up agenda focusing investment outside London
• 7.6% annual growth in tech employment
• Strong **university partnerships** driving innovation

This focus means more funding opportunities for local businesses.

Government Grants and Schemes

Innovate UK Grants

What it is: The UK's innovation agency offers competitive grants for R&D projects.

Funding available: Typically 25-70% of project costs, from £25,000 to £10 million+

Relevant programmes:

• Smart Grants: Open competition for innovative projects
• Innovate UK Loans: Low-interest loans for later-stage innovation
• Knowledge Transfer Partnerships: Funding to work with universities
• Catapult Centres: Access to advanced facilities and expertise

Best for: Businesses developing genuinely innovative technology

How to apply: Via the Innovation Funding Service (IFS) portal

Made Smarter Adoption Programme

What it is: Supporting manufacturing SMEs to adopt digital technologies.

Funding available:

• Up to 50% match funding for technology projects
• Free digital roadmapping workshops
• Fully funded leadership training
• Funded technology internships

Eligible technologies:

• Industrial Internet of Things (IIoT)
• Artificial intelligence and machine learning
• Robotics and automation
• Augmented and virtual reality
• 3D printing and additive manufacturing

Best for: Manufacturing businesses in the West Midlands

How to apply: Through the Made Smarter regional hub

R&D Tax Credits

What it is: Tax relief for companies investing in research and development.

Benefit:

• SMEs can claim up to 27% of R&D costs
• Loss-making companies can receive cash credits
• Enhanced rates for R&D intensive SMEs

Qualifying activities:

• Developing new products or services
• Improving existing products or processes
• Creating new software or systems
• Solving technical challenges

Best for: Any business doing genuine R&D work

How to claim: Through your corporation tax return (recommend specialist adviser)

West Midlands Combined Authority Funding

Business Growth West Midlands

What it is: WMCA's business support programme.

What's available:

• Free business diagnostics
• Access to grant programmes
• Expert advice and mentoring
• Networking opportunities

How to access: Contact Business Growth West Midlands

Digital Bootcamps

What it is: Fully funded training programmes for your staff.

Courses available:

• Software development
• Data analytics
• Digital marketing
• Cybersecurity
• Cloud computing

Best for: Upskilling existing staff in digital skills

Investment Programmes

What's available:

• WMCA Investment Fund: Loans and equity for growing businesses
• Midlands Engine Investment Fund: Debt and equity finance
• Regional Angels Programme: Support for angel investment

University Partnerships

Knowledge Transfer Partnerships (KTPs)

What it is: Funded partnerships between businesses and universities.

How it works:

• University provides a graduate (KTP Associate) to work on your project
• Project supervised by academic experts
• Government funds 50-67% of costs
• Typically 1-3 year projects

Costs: £50,000-80,000/year (with 50-67% grant)

Local universities:

• University of Birmingham
• Aston University
• Birmingham City University
• University of Wolverhampton
• Coventry University

Best for: Longer-term innovation projects needing specialist expertise

Innovation Vouchers

What it is: Funding to access university expertise for smaller projects.

Funding available: Typically £2,000-10,000

What's covered:

• Research and analysis
• Prototyping
• Testing and validation
• Expert consultancy

Funding for Software Development

If you're specifically looking to fund custom software development, consider:

1. R&D Tax Credits: If the software involves genuine innovation
2. Made Smarter: If it's manufacturing-related digital technology
3. Innovation Grants: For genuinely novel software applications
4. KTPs: For longer-term, research-based projects
5. Standard business finance: For operational software needs

How We Can Help

At LKM Software Ltd, we help West Midlands businesses with:

• Grant-funded projects: We've worked on Made Smarter and KTP projects
• R&D documentation: Helping articulate the innovation in your project
• Technology scoping: Defining projects suitable for funding applications
• Phased delivery: Structuring projects to match funding milestones

Contact us if you're exploring funded technology projects—we're happy to discuss how we might support your application.

Ready to Explore Funding?

Contact us to discuss your technology project. We can help you understand which funding routes might be suitable and how to structure your project for the best chance of success.