R&D Innovation Loan: How to Finance Your R&D Without Dilution

Introduction

Building a new technology, innovative product, or deeptech solution? You already know how expensive R&D is technical hires, prototypes, testing, IP filings, industrialisation… and you don’t want to give up equity too early.

Here’s the good news: you can finance part of your R&D without dilution, especially through Bpifrance’s R&D Innovation Loan (PIR&D). It’s one of the most powerful levers to support your development while keeping control of your cap table.

This article explains how the R&D Innovation Loan works, who qualifies, what it can fund, and how to maximise your chances of approval.

1. Why Finance Your R&D Without Dilution?

R&D is the engine of your future growth but also one of the riskiest and most cash-burning stages, often before any revenue shows up.

While public grants are attractive, they have limitations:
Non-repayable
Hard to obtain
Often limited to specific eligible expenses,
Long delays before disbursement.
Result: you burn through cash and may feel forced to raise funds too early, risking heavy dilution at a low valuation.
The R&D Innovation Loan bridges the gap between early-stage ideas and product-market traction.

2. What Is the R&D Innovation Loan (PIR&D)?

The PIR&D is a flexible financing tool from Bpifrance, designed for companies developing technology-intensive or market-innovative projects. Key Features:

In short: less risky than traditional bank loans, and much more founder-friendly.

3. Who Can Benefit From the PIR&D?

The PIR&D is open to:

Criteria	Description
Company size	French SMEs or mid-cap companies already incorporated
Project type	Innovation in technology, market use, or product model
Stage	Moving from idea to credible execution and market traction
Objective	Moving from idea to credible execution and market traction

It is also open to a wide range of companies not just deeptech.

If your innovation relates to: usage models, software or technical development, process innovation, integrating existing tech into new markets... then you may be eligible.

4. What Can You Fund With the PIR&D?

Almost every stage of your innovation journey can be financed:

Prototype or Proof of Concept (POC)

Technical assembly
Concept validation
Functional testing

Technology development

Software or hardware R&D
Advanced engineering
New manufacturing methods

Testing, validation & market studies

Lab or real-world testing
Go-to-market validation
Impact and feasibility analysis

IP strategy

Patent filings
International extensions
Legal defence of IP rights

In short: it helps turn raw ideas into credible, industrial-ready products.

5. Why the PIR&D Is a Smart Move

Here’s what the PIR&D changes:

Without PIR&D	With PIR&D
Tight cash flow	Reinforced runway
Delayed prototype	Prototype + tested POC
Early equity raise = high dilution	Delayed raise = better valuation
Weak KPIs during pitch	Strong KPIs = credible narrative

The PIR&D extends your runway, helping you raise later, bigger, and better.

6. Be Warned: It Requires a Solid Application

To unlock this loan, your application must clearly show:

A structured R&D roadmap
A coherent financing plan
A clearly justified innovation (tech or usage-based)
A capable execution team
Market signals or early traction

A weak application can lead to:

Loan rejection,
A lower-than-requested amount,
Lengthy delays.

But a well-prepared file = maximum leverage.

7. Flag Helps You Secure the PIR&D

Conclusion: Funding Your R&D Prepares Your Fundraising

The R&D Innovation Loan is far more than a cash boost.
It’s a strategic tool to help you turn an idea into proof, build traction, and raise equity later on your terms.

So...
Ready to fund that R&D?

For the latest on innovation funding, follow us on Linkedin

Flag, the one-stop-shop for financing innovation.