It is clear that European funding is not simply given to anyone who asks. If you have a good idea and a good proposal in mind all you have to do is find the right consortium and of course, write down the perfect proposal to request funding and implement your idea. However, funding is not easily given and, national agencies will need to be able to verify your financial capacity before they grant you the funding you’re looking for.
This is done in order for the national agency to be able to prove that, no ‘’funny business’’ is going to happen regarding the funding that will be given to your organization for further research. It is a very, very important process for every type of European project, especially Horizon 2020 projects.
Regarding the process of the financial capacity verification, for Horizon 2020, the financial capacity of project coordinators is verified when the requested EU funding for the action is equal or superior to €500,000.
There are of course certain exceptions. If the coordinator is a public body, a higher secondary education establishment, an international organization, a legal entity whose participation is guaranteed by a member state or an associated country in accordance with the Horizon 2020 annotated model grant agreement over a private individual in receipt of a scholarship.
Your role in the project does not really matter. The national agency might also have to verify your financial capacity. That is if there are reasonable doubts on it on the basis of information available.
Now, before you actually submit your proposal, it is a good idea for you to perform a financial capacity self-check using the Horizon 2020 financial self-check tool. This particular tool will be able to provide you with enough information regarding your financial capacity and it will save you a lot of time when it comes to submitting a proposal that might not get approved due to your financial capacity.
How is the financial capacity assessed?
Now, this is indeed a very good question. As an organization, you need to know the process that the national agencies will be following in order for them to assess your financial capacity. These are the ways that financial capacity is assessed for a Horizon 2020 proposal.
- Does the applicant have sufficient liquidity?
- Is the applicant financially autonomous?
- Is the applicant solvent?
- Is the applicant capable of creating profit? This condition, of course, does not apply to private individuals.
The financial capacity assessment results will be taken into account during the evaluation process of the proposal and of course, the evaluation process of your ability to implement the project. There are certain measures that will be imposed as indicated in the section on grant preparation in case the results seem to be weak or insufficient.
In case your financial capacity needs to be assessed, you will be informed in due time through your account in the participant register. Of course, you will have to provide all of your financial information and relevant supporting documents. You will need to cover the last two closed financial years. The important documents that you will need will be:
- the profit and loss statement balance sheet and accompanying notes
- audit report if your requested EC contribution is superior to €750,000
In case there are more documents that will need to be provided, in certain specific cases, you will be informed beforehand in order for you to have the time to provide the agency with those documents. The agency will carry out a financial capacity assessment on the last two closed financial years of your business or organization.
The financial capacity assessment process can most certainly be considered one of the most important parts of the entire assessment. If you want to make sure that your proposal will not get rejected due to financial capacity problems then you might want to make sure that, you will check out this particular part before you actually apply for funding.
Having your data will definitely help you know whether your proposal stands a chance of actually getting rejected due to your financial statement. That way, you can act accordingly and make sure that the proposal you’re going to be submitting will not have to face technical problems like that.