How Subcontracting Affects Your Eligibility for Eurostars and Similar Funding

How Subcontracting Affects Your Eligibility for Eurostars and Similar Funding

Manufacturing may be the backbone of Europe’s industrial sector, but it’s not always easy to grow a small- to medium-sized company due to high levels of competition. Finding funding opportunities and grants for European countries, such as Eurostars and the EUROPA program from the European Union, can make growth much easier. These grants for European countries are all tailored in different ways to specific industries, but there are more manufacturing related funding opportunities than any other type.

Some funding is offered in the form of a loan that must be repaid, while others are true grants for European countries with no expectation of repayment.

Each one of the grants for European countries has its own unique set of requirements for applying for funding. Understanding the application requirements for each of the grants for European countries you’d like to apply for will help you determine if your current use of subcontracting services could compromise your chances of getting funding.


Eurostars Grants for European Countries

Eurostars is one of the largest and most well-known program offering grants for European countries. As with the other grants for European countries listed here, the funding provided through Eurostars is provided by the European Union. This generally means that you must live in an EU member state to apply, although there are some other regions that qualify for these grants for European countries. Eurostars offers grants for European countries that support small- to medium-sized businesses engaged in research and development work. Many manufacturing companies qualify for Eurostars grants for European countries because their primary business involves R&D, even if they do produce and sell products as well.

Relying on subcontractors as part of your business affects your Eurostars application for grants for European countries in two main ways. First, at least 50 percent of your company’s total R&D budget must be dedicated to the project that you’re proposing for funding through Eurostars. This 50 percent total cannot include subcontracting fees or costs in order for you to receive these grants for European countries.

Also, Eurostars grants for European countries also require a collaboration between at least two small- to medium-sized businesses operating in two different EU member countries. Subcontractors do not qualify as partners in these cases, but it may be possible to make an alternative business agreement with someone you’ve used as a subcontractor in the past to qualify for grants for European countries.


Executive Agency for Small and Medium-sized Enterprises (EASME) SME Instrument

The Executive Agency of Small and Medium-sized Enterprises, or EASME, is a European Union project developed specifically to grow businesses across the EU member states. The branch dealing with grants for European countries is known as the Small and Medium-sized Enterprises Instrument. This organization works differently than Eurostars and other grants for European countries because it guides grant winners through an entire design and development process. Coaching is included along with funding through grants for European countries to help startups get established or to guide an existing company through expansion.

Subcontracting is perfectly acceptable during certain stages of working through the program offered by the EASME. Funding provided through the grants for European countries can be used to pay subcontractors if they’re working on the project or product you specified in the grant application. Unlike with Eurostars, you’re not limited in hiring subcontractors by a specific percentage of the total budget. However, you will need to specify why you’re hiring subcontractors on the forms you must fill out to continue receiving parts of the grants for European countries. This includes showing that you’ve selected subcontractors by choosing the ones that offer the best value for their price.


Horizon 2020 SME Instrument

Dozens of distinct grants for European countries are available under the Horizon 2020 umbrella organization. The purpose of the Horizon 2020 project is to increase competitiveness of business across Europe through a series of interconnected initiatives. Many of these initiatives are grants for European countries focused on specific research and manufacturing goals. For example, the Smart Anything Everywhere program offers funding for developing new Internet of Things (IoT) and interconnected products and innovations. Other grants for European countries include the Factories of the Future funding and the SME Instrument projects.

Each distinct program forming the bulk of the grants for European countries provided through Horizon 2020 has its own requirements and limitations on the use of subcontractors. Check the individual application and work program listings to learn how you can use subcontractors when receiving funding from these grants for European countries.

Once you’ve secured funding for a grant that allows for subcontracting, visit European Subcontracting Network for help. You can find the subcontracting services needed to make the most of your grants for European countries so your business grows as intended.