How to read the rules of a grant competition?

The rules of a grant competition should be read not as general information about the programme, but as a document that determines who can submit an application, what expenditure can be financed, what conditions must be met and on what grounds a project may be rejected.

In practice, a proper analysis of the rules makes it possible to assess whether it is worth preparing an application, how to plan the investment, how to describe the project and which formal, financial and operational risks need to be eliminated before work on the documentation begins. In the 2021-2027 perspective, this document is usually called the project selection rules.

Why are the competition rules the most important document of a call?

The competition rules are the basic document setting out the rules for taking part in a call. They contain information on the programme objective, project types, the list of eligible applicants, deadlines, how to submit the application, project assessment, required attachments, eligible costs and obligations after obtaining funding.

A common mistake made by businesses is to start the analysis with the amount of the grant or the list of possible expenses. Yet even a very attractive programme may be unavailable if the company does not meet the formal conditions, the investment does not fit the objective of the measure or the project does not achieve the required indicators.

The rules should be treated as a decision-making guide. They answer three basic questions:

• can the company apply for funding?
• does the planned project fall within the scope of the call?
• can the project's costs, deadlines and results be defended at the assessment stage?

If the answer to any of these questions is negative, preparing the application may have no business justification.

Where to start reading the competition rules?

It is worth starting the analysis of the rules by checking the basic data about the call. You should not go straight to the description of costs or the scoring criteria, because you first need to establish whether the project falls within the programme at all.

At the outset, you should check:

• the name of the programme, measure and project type,
• the institution organising the call,
• the start and end dates of the call,
• the allocation available in the call,
• the minimum and maximum project value,
• the minimum and maximum amount of funding,
• the permitted level of funding,
• the form of support, i.e. a grant, reimbursement, advance payment, preferential loan or blended instrument,
• the geographical area covered by the call,
• the group of eligible applicants.

Already at this stage, many calls can be ruled out that seem attractive at first glance but in practice do not concern the given type of business, region, sector or scale of investment.

Current calls should be verified in official sources, such as the European Funds Portal, as well as on the websites of institutions running specific measures, e.g. PARP, BGK, NCBR, ARiMR, NFZ or regional managing authorities.

How to check whether a company qualifies for the competition?

One of the most important parts of the rules is the section on applicants. It specifies who may apply for support. It is not enough for a company to conduct business activity. In many calls, detailed formal conditions matter.

Most often, the following need to be verified:

• the company's status, e.g. micro, small, medium-sized or large enterprise,
• the legal form of the business,
• the PKD code or the actual scope of business activity,
• the place of business,
• location of the investment,
• the business history,
• no exclusion from the possibility of receiving public funds,
• the company's financial situation,
• de minimis aid or State aid limits,
• personal and capital links with other entities.

Particular attention must be paid to SME status. In many programmes, not only the data of a single company is assessed, but also its links and partnership relations with other entities. This may affect the number of employees, turnover, balance sheet total and the final classification of the business.

It is a mistake to assume that, because a company is small “in the everyday sense”, it automatically meets the SME conditions. The company's status should be determined in accordance with the definition contained in Annex I to Commission Regulation (EU) No 651/2014, and not solely on the basis of intuition.

How to analyse the competition objective and project types?

The next stage is analysing the objective of the competition. This is a part that is often read too superficially. Yet the programme objective determines how the project should be described, what results need to be demonstrated and what expenditure can be justified.

If the call concerns energy efficiency, simply buying new equipment may not be enough – the energy effect must be demonstrated. If the call concerns digitalisation, the expenditure should lead to a real transformation of processes, not just the replacement of basic equipment. If the programme finances innovation, the project must meet the definition of innovativeness given in the documentation.

In practice, you should check:

• which project types are permitted,
• what objectives the investment must pursue,
• what results should be achieved,
• whether the project is to concern a new investment, business development, technology implementation, R&D work, ecology, digitalisation, exports, healthcare or another specific area,
• whether the project may cover only the purchase of fixed assets or also requires an advisory, training, research or implementation component,
• whether the rules exclude certain types of activity or expenditure.

Good practice is to compare the planned investment with the competition objective in a short table. If the link between the investment and the objective of the call cannot be clearly demonstrated, the risk of a negative assessment increases.

Eligible and ineligible costs – how to read them?

The catalogue of eligible costs is one of the most frequently analysed parts of the rules. However, it should be remembered that the mere mention of a given type of expenditure in the documentation does not yet mean that it will be automatically accepted in every project.

An eligible cost should be:

• consistent with the objective of the call,
• necessary to implement the project,
• reasonable in terms of value,
• properly documented,
• incurred within the permitted period,
• compliant with the competitiveness principle or public procurement law, where applicable,
• linked to the physical scope of the project,
• capable of being settled on the basis of accounting documents.

For example, the purchase of a car, computer, machine, IT system or equipment may be formally permitted only if it follows from the project objective and is properly justified. The assessment committee may challenge an expense if it considers it too general, excessive, unrelated to the results or replaceable by a cheaper solution.

Ineligible costs are equally important. This part of the rules may contain exclusions concerning VAT, the purchase of used fixed assets, leasing, construction works, real estate, operating costs, salaries, promotion, advisory services or expenditure incurred before the application was submitted.

Level of funding – why is the grant percentage not enough?

Many business owners focus on the information that a programme offers, for example, 50%, 65% or 85% funding. This is important, but not sufficient to assess the profitability of the project.

When analysing the level of funding, you need to check:

• whether the percentage of support applies to net or gross costs,
• whether VAT can be an eligible cost,
• whether the level of support depends on the size of the company,
• whether the aid intensity depends on the investment location,
• whether there are amount limits for individual cost categories,
• whether a minimum own contribution applies,
• whether support is paid as reimbursement, an advance payment or a mixed payment,
• whether the project requires financial security.

A practical analysis should cover not only the value of the grant, but also cash flows. In the case of reimbursement, the business first finances the expense from its own funds or a bank loan, and only later recovers part of the costs. This means that financial liquidity has to be planned.

Deadlines in the rules – which dates are key?

The competition rules contain several types of deadlines. The most obvious is the deadline for submitting applications, but in practice other dates also matter.

You should verify:

• the call opening date,
• the call closing date,
• the time at which the electronic system closes,
• the expenditure eligibility period,
• the possible project start date,
• the latest permitted project completion date,
• the deadline for providing attachments,
• the deadline for supplementing or correcting the application,
• the deadline for signing the agreement,
• the dates for submitting payment claims,
• the project durability period.

A common mistake is incurring expenditure too early. In many calls, a cost incurred before the permitted date cannot be settled. This may concern not only the payment of an invoice, but also the signing of a contract with a contractor, placing an order or starting work.

Project selection criteria – how to read the scoring section?

The project selection criteria indicate how the institution will assess the application. This is one of the most important parts of the documentation, as it shows what the project can score points for and what conditions it must meet on a mandatory basis.

The criteria can usually be divided into:

• formal criteria,
• access criteria,
• substantive criteria,
• scoring criteria,
• tie-breaking criteria,
• bonus criteria.

Formal criteria concern the correctness of the documentation, the deadline for submitting the application, the completeness of attachments and compliance with the basic conditions for participation. Substantive criteria relate to the quality of the project, its legitimacy, results, budget, feasibility and consistency with the programme objective.

The mandatory criteria are the most important. If the project does not meet them, it may be rejected regardless of the potential number of points. Only once the mandatory conditions have been met is it worth analysing the score and the competitive chances.

Good practice is to prepare a working criteria matrix. For each criterion, it is worth entering:

• the requirement from the documentation,
• how the project meets the requirement,
• the document or section of the application confirming that the criterion is met,
• the assessment risk,
• the actions needed to reduce the risk.

Such an analysis helps avoid a situation in which the project is well described in general terms but does not respond directly to the assessment criteria.

Attachments to the application – why should they be analysed from the start?

Many applicants leave the attachments until the end of their work on the application. This is a risky approach. The rules often require documents that take longer to prepare than filling in the form itself.

These may include, among others:

• a business plan,
• a financial model,
• a financial analysis,
• registration documents,
• de minimis aid declarations,
• financial statements,
• credit promises,
• documents confirming the right to the property,
• administrative permits,
• technical documentation,
• cost estimates,
• quotations from suppliers,
• an energy audit,
• an innovation opinion,
• environmental documents.

A single missing attachment may result in a request for supplementation, a lower score or the rejection of the application, depending on the rules of the given call. That is why the list of attachments needs to be checked as early as the stage of deciding whether the company will take part in the call at all.

How to read the instructions for completing the application?

The rules are usually not the only document of the call. The instructions for completing the application are also very important. They indicate how to interpret individual fields of the form, what data should be entered and how detailed the project description should be.

The instructions may contain information that is not stated directly in the rules, e.g.:

• how to describe the project objective,
• how to justify the costs,
• how to demonstrate compliance with the criteria,
• how to present the indicators,
• how to describe the risks,
• how to demonstrate financial capacity,
• how to complete the schedule,
• how to present the sources of financing,
• how to justify the project's impact on the development of the company.

Preparing an application without analysing the instructions often leads to vague descriptions. Such an application may be formally complete but weak in substance, because it does not meet the expectations of the assessing institution.

It is worth analysing the call documentation comprehensively. For example, for individual PARP calls, not only the rules are published, but also instructions, attachments and documents concerning the assessment rules – e.g. on the website for the SMART Path.

Project indicators – a small part of the rules with big consequences

Project indicators show what results are to be achieved thanks to the funding. They may concern, among other things, the number of solutions implemented, the value of investments, the number of jobs created, energy savings, emission reductions, revenue growth, the number of service users or the implementation of new processes.

Once the agreement is signed, the indicators become the beneficiary's obligation. Failure to achieve them may lead to corrections, the need to repay part of the funds or problems at the audit stage.

Before entering the indicators in the application, you need to check:

• whether the indicator is mandatory or additional,
• what its definition says,
• how it will be measured,
• what documents will confirm its achievement,
• by what deadline it must be achieved,
• whether the company has a real influence on achieving it,
• what risk is associated with failing to achieve it.

Indicators should not be declared solely to make the application more attractive. Indicators must be ambitious, but achievable and possible to document.

State aid and de minimis aid – what needs to be checked?

The competition rules should indicate whether support is granted as State aid, de minimis aid, compensation, a financial instrument or another form of support. This has significant consequences for the business.

In practice, you should check:

• the legal basis for granting aid,
• the de minimis aid limit,
• the State aid intensity,
• own contribution requirements,
• the rules on cumulation of aid,
• the obligation to present certificates of aid received to date,
• the impact of links with other entities on aid limits.

An incorrect State aid analysis may result in the funding being calculated incorrectly or the permitted limits being exceeded. Information on the rules for granting State aid is published by UOKiK (Office of Competition and Consumer Protection). For larger projects, it is worth verifying this element before submitting the application, and not only at the stage of signing the agreement.

What to watch out for in the obligations after signing the agreement?

The competition rules and the model agreement set out not only the conditions for awarding the grant, but also the beneficiary's obligations after receiving support. This is a part that is often overlooked at the application stage, even though it is of considerable operational importance.

After signing the agreement, the beneficiary may be required to:

• keep separate accounting records for the project,
• apply the competitiveness principle,
• properly annotate accounting documents,
• archive the documentation,
• submit payment claims,
• achieving and maintaining indicators,
• provide information about the funding,
• maintain project durability,
• submit to audits,
• notify changes to the project.

For the company, this means ensuring not only a good application, but also efficient project implementation. A grant does not end when the decision to award the funds is received. In many cases, the most important risks only arise at the stage of purchases, settlements and audits.

The most common mistakes when reading the competition rules

The most common mistakes when analysing the rules include:

• focusing solely on the amount of the grant,
• overlooking the formal conditions concerning the applicant,
• inaccurate checking of the project location,
• incorrect determination of SME status,
• assuming that every investment purchase will be an eligible cost,
• no analysis of the mandatory criteria,
• overlooking the instructions for completing the application,
• leaving the attachments until the last stage,
• underestimating the own contribution,
• failing to take into account the reimbursement rules,
• entering unrealistic indicators,
• failing to take into account the obligations after signing the agreement,
• basing the decision on a short summary of the call instead of the full documentation.

Each of these mistakes can have specific consequences. It may mean a loss of time, rejection of the application, the need to restructure the project, settlement problems or the inability to recover part of the costs.

How to analyse the rules step by step in practice?

It is safest to analyse the rules according to a fixed procedure. This reduces the risk of overlooking an important condition. Recommended order of analysis:

• checking the call deadline and the institution organising the call,
• confirming whether the company falls within the list of eligible applicants,
• verifying the project location,
• analysing the competition objective and project types,
• checking the minimum and maximum project value,
• analysing the level of funding and own contribution,
• verifying eligible and ineligible costs,
• analysing the formal and substantive criteria,
• preparing a list of required attachments,
• checking the indicators and project obligations,
• analysing the rules for project implementation and settlement,
• assessing the risk and whether it is worthwhile to prepare the application.

Only after going through these stages is it worth deciding to prepare the application documentation. Otherwise, there is a risk that work on the application will start without confirmation of the project's basic eligibility.

When is it worth using an expert's help?

Advisory support is particularly useful when the rules are extensive, the project is of high value, State aid issues arise, the project covers several cost categories or the company is not sure whether it meets the participation criteria.

It is worth considering grant advisory servicesif:

• the project requires an analysis of cost eligibility,
• a business plan or financial model needs to be prepared,
• the scoring chances need to be assessed,
• the investment includes unusual expenditure,
• the project requires an economic, technological or environmental justification,
• the company wants to reduce the risk of the application being rejected,
• the beneficiary needs support not only with the application, but also with project implementation and settlement.

A professional analysis of the rules is not just a summary of the document. Its purpose is to translate the provisions of the call into specific business decisions: whether to apply, to what extent, with what budget, with what indicators and at what level of risk. This scope is covered by the funding analysis and selection service.

How to use the rules to prepare a better application?

The competition rules should be the basis for structuring the entire application. This means that the project description, schedule, budget, indicators and attachments should follow directly from the rules of the call.

A good application should not be a general presentation of the company. It should show that the project:

• responds to the objective of the call,
• meets the access criteria,
• is financially and organisationally feasible,
• includes justified costs,
• leads to measurable results,
• is consistent with the call deadlines,
• can be properly settled,
• limits risks on the part of the financing institution.

That is precisely why reading the rules is a strategic stage, not a formality. The subsequent structure of the project, the arguments in the application and the security of settlement depend on the quality of this analysis.

Where to look for current grants and competition documentation?

Up-to-date information on calls can be checked on official public websites and in specialised grant databases. A good starting point is the free grant search engine with an AI Assistant, which makes it possible to organise the funding opportunities available from all over Poland and international EU calls by type of business, investment and target group.

However, it should be borne in mind that information about the existence of a call alone is not enough. Each programme requires a separate analysis of the rules, criteria, attachments and instructions. Only after such verification can you assess whether the project has a real chance of funding.

If you are planning to apply for funding, it is worth verifying the eligibility of the investment, call deadlines, the possible level of support and formal risks in advance. We invite you to an individual analysis of your project.Contact an expert