Monday, 1 June 2015

Drowning, not waving

The grant agreements for phase 2 of the new SME Instrument are now being signed and SMEs are discovering the cash flow implications. Assuming the project reporting and payments run to schedule, each 24 month project will spend about half its duration cash negative.

But initial signs are that things will not work to schedule. The EC missed its target date for signing grant agreements – offering that the 1 April start date could remain, but with the pre-financing delayed until the agreements are signed. History suggests that final payments will also arrive late. As we have mentioned at other times, the grant agreement says that the aim of the pre-financing is to provide the beneficiary with a float. Let’s hope they can hold their breath!

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