The most common reasons for rejection of a grant application

A grant application is most often rejected because of formal errors, inconsistency between the budget and the project description, a poor-quality business rationale and the project's failure to comply with the criteria of the given call. In practice, this applies both to small companies applying for the first time and to entities with experience in obtaining EU and national funds.

Below we present a detailed analysis of the reasons for negative assessments of applications and show how to reduce the risk of rejection as early as the stage of preparing the documentation.

Why grant applications are rejected – the assessment context

The application assessment procedure usually comprises three basic stages: verification of formal conditions, assessment of access criteria and substantive (points-based) assessment. Each of these stages is eliminatory.

A negative assessment at the first stage means that the expert assessor does not proceed to further analysis of the project. This means that a formal error of seemingly minor importance may result in the application being entirely excluded from further proceedings.

According to information published on the portal of European Funds, the procedures for assessing applications are strictly defined in the rules of individual calls, and managing authorities are obliged to apply uniform criteria to all applicants. In practice, this means that the assessment cannot be negotiated or supplemented outside strictly defined cases of formal supplementation.

The most common formal reasons for rejection of a grant application

Failure to meet the eligibility criteria for applicants

The first and one of the most common reasons for rejection of an application is that the applying entity is not eligible for the given programme. This applies, among others, to situations in which:

• the applicant does not have the required SME status in line with the definition in Annex I to Commission Regulation (EU) No 651/2014,
• the applicant's business activity is excluded from support under the given programme (e.g. activity excluded from de minimis aid),
• the applicant is not entered in the relevant register or has been operating for a shorter period than required by the rules,
• the registered office or the project location is not in an area eligible for support.

Verifying the entity's status should be the first step before deciding to apply. For this purpose, it is worth using the grant search engine, which makes it possible to match a programme to the business profile.

Incomplete application documentation

The second significant category of formal errors is missing required annexes or submitting documents in out-of-date versions. The most common shortcomings include:

• no qualified signature of a person authorised to represent the applicant,
• out-of-date or missing financial statements,
• no declarations concerning de minimis aid or State aid received in the reference period,
• inconsistency between the data in registration documents and the data in the application,
• no business plan, financial analysis or feasibility study – if required.

In calls that provide for the possibility of supplementing the application, failure to meet the deadline for supplementing it results in the application being left unexamined.

Deadline and technical shortcomings

In the electronic systems used for calls (e.g. LSI, SOWA EFS, the PARP application generator), an application may also be rejected because it was submitted after the deadline, because of technical errors during submission or because of an incorrect electronic signature. Submitting an application in the last hours of a call increases the risk of such problems.

Substantive reasons for rejection of a grant application

Mismatch between the project and the programme objectives

Each call has precisely defined objectives and result indicators to which the project is expected to contribute. Applications describing undertakings that do not fit the intervention logic of the given measure are rejected at the substantive assessment stage. A typical mistake is attempting to “fit” an existing business idea to a programme, whose objectives differ from the actual scope of the project.

According to documentation published by the Polish Agency for Enterprise Development (PARP), expert assessors pay particular attention to the consistency between the diagnosis of the problem, the proposed activities and the expected project results.

Poor quality of the business rationale and market analysis

In development and innovation projects, a key element of the assessment is the quality of the business rationale. The most common mistakes in this area include:

• a vague description of the problem the project is intended to solve,
• no analysis of the competition and of the positioning of the product or service on the market,
• unrealistic sales and revenue forecasts,
• no indication of the sources of market data,
• omission of an analysis of project risks and ways of mitigating them.

Experts assess not only the idea itself, but above all the applicant's ability to implement it effectively and achieve lasting economic effects.

Inconsistency between the budget and the project description

The project budget must clearly follow from the planned activities and comply with the catalogue of eligible costs set out in the call rules. The most common mistakes in this respect are:

• including ineligible costs in the budget,
• overstating the value of purchases in relation to market prices,
• no documented survey of market prices,
• incorrect assignment of costs to budget categories,
• omission of the own contribution or its incorrect calculation.

Costs are verified both at the application assessment stage and after the agreement has been signed – during project settlement. Budget errors detected later may result in an obligation to repay part of the funding.

Insufficient innovation or added value of the project

In innovation-oriented calls (including those organised by the National Centre for Research and Development (NCBR)), one of the main reasons for a low score is a failure to demonstrate the actual innovativeness of the solution. Applicants often confuse product or process innovation with modernisation or a standard replacement investment. In such a situation, the project may receive too few points to qualify for funding, even if it formally meets the access criteria.

Errors in defining project indicators

Output and result indicators form the basis for settling the project and assessing its effectiveness. Defining them incorrectly – overstating them, understating them or failing to link them to project activities – is a common reason for a lower score or rejection of the application. Indicators must be measurable, realistic and achievable within the project implementation period and its durability period.

Other reasons for rejection of a grant application

Breach of horizontal principles

Projects co-financed from EU funds must comply with horizontal principles, including the principle of sustainable development, equal opportunities and non-discrimination, and accessibility for persons with disabilities. Failure to address these principles adequately in the application may result in a negative assessment.

Problems with project durability

In investment projects, the beneficiary is obliged to maintain project durability – as a rule for 5 years from the final payment, and for SMEs for 3 years, in accordance with Article 65 of Regulation (EU) 2021/1060 and the provisions of the grant agreement. Failure to demonstrate the ability to maintain the project effects during this period – both organisationally and financially – is one of the significant reasons for rejection of an application.

Insufficient financial capacity to implement the project

The applicant must demonstrate the ability to finance the own contribution and to pre-finance expenditure before receiving reimbursement. A negative assessment of the applicant's financial situation – resulting from the financial statements or an analysis of ratios – may result in the application being rejected regardless of the quality of the project itself.

How to reduce the risk of rejection of a grant application

Preparing a successful application requires a systematic approach covering an analysis of the call documentation, matching the project to the programme objectives, developing a consistent budget and verifying the documentation before it is submitted. In practice, it is recommended to:

• carry out a preliminary verification of the eligibility of the entity and the project,
• analyse the assessment criteria in detail and prepare the application with a view to meeting them to the fullest extent,
• document all budget assumptions through an analysis of market prices,
• prepare the application well in advance, allowing it to be checked by someone outside the project team,
• use grant advisory services provided by experienced specialists.

Applicants who use expert support at the documentation preparation stage significantly increase their chances of a positive assessment of the application and of successfully settling the project after its implementation.

What to do if the application has been rejected

A negative assessment of an application does not always mean the end of the process. The applicant has the right to read the justification for the assessment and, in certain cases, to lodge an appeal (protest) with the managing authority. The appeal procedure is formalised and requires strict deadlines to be met, so it is worth consulting a person with experience in such proceedings on whether it is justified to lodge one.

In the case of a substantive rejection, the project can also be prepared again and submitted in a subsequent call, taking into account the conclusions from the previous assessment.

If your application has been rejected, or you are planning to submit an application and wish to reduce the risk of a negative assessment, we invite you to a consultation.Contact an expert