The SME Instrument is worth €3 billion over seven years and is part of 'Horizon 2020', the EU's biggest ever research and innovation framework with a seven year budget worth nearly €80 billion.
The project aims to be a simple and fast way for high-growth business to get investment and support across varies industries including that of cosmetics.
Innovative businesses sometimes struggle to get the finance they need to grow, especially after the financial crisis. The EU believes that SMEs and innovations are drivers of growth, jobs, and the economic recovery.
European Commissioner for Research, Innovation and Science Máire Geoghegan-Quinn said, "The response to the new SME Instrument is encouraging. There is clearly demand out there for this kind of support. We hope many of the business plans being financed will mature to become real products and services, generating growth and jobs for our economies."
The EU says the focus for funding will be on “potentially disruptive” businesses which refers to those that have helped to create a new market and support network, and eventually disrupt an existing market and value network, displacing an earlier technology.
Recent cosmetic companies to fall into this category includes the likes of Birchbox which revolutionised the sampling subscription market.
Eight non-EU businesses will also receive a total of €400,000
About 645 projects should be funded in 2014, rising to 670 in 2015. Applications can be submitted at anytime but are evaluated four times each year.
Out of 2,666 businesses applying for the first round of grants, Spain was the most successful, with 39 proposals selected, followed by the UK with 26, Italy with 20, Germany with 11, and Ireland with ten.
Eight non-EU businesses will receive a total of €400,000 in EU money. While Israel (four proposals), Norway (two proposals), and Turkey (two) are not in the EU, they are part of the Horizon 2020 programme.
The EU will also provide three days of business coaching to successful applicants. The two later phases cover areas such as research and development and commercialisation.