Co-financing

Co-financing is the part of the project cost you cover yourself. In an innovation action at 70% it is the remaining 30% of a profit-making partner's eligible costs; in national and structural-fund programmes it is frequently much larger, and in some schemes it exceeds half.

It is real money, not a paper entry. For a company with a €1 million budget share in an innovation action, it means €300,000 of its own resources over the project's life, spent before or alongside the reimbursement rather than after it.

Where it comes from is your problem, and it must be sustainable for the whole duration. Acceptable sources are your own revenue or reserves, investor capital, bank finance, or a national or regional scheme designed to co-finance EU projects. Your own staff time counts, but only because their salaries are your eligible costs, not as a separate contribution on top.

Another EU grant is not an acceptable source. The prohibition on double funding means the same cost cannot be reimbursed twice from the EU budget, and the co-financing must be genuinely non-EU money.

This is the most common reason an SME withdraws between winning and signing. The proposal is celebrated, the grant agreement is prepared, and the finance director works out what 30% of the budget means in cash across three years. Do that arithmetic before submitting, not after the letter arrives.