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COVID - 19 | Future Fund scheme to launch in May for companies
A new form of financial help for UK venture-backed companies will be launched by the government in May called the Future Fund.
The help is in the form of convertible loans ranging from £125,000 to £5 million to UK companies, subject to at least equal match funding from private investors.
It must be used solely for working capital purposes and not to repay any borrowings, make any dividends or bonus payments to staff, management, shareholders or consultants or, in respect of the Government loan, pay any advisory or placement fees or bonuses to external advisers.
The funding will automatically convert into equity on the company's next qualifying funding round. The scheme, delivered in partnership with the British Business Bank, is aimed at companies that cannot access the Coronavirus Business Interruption Loan Scheme and are more suited to equity investment.
More details about the scheme can be found in the headline terms.
This new initiative is designed to help the UK's tech and life sciences industries cope with the disruption caused by the Coronavirus.
“Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis... This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Eligibility
A company will be eligible If:
its business is based in the UK
its business can attract the equivalent match funding from third party private investors and institutions
its business has previously raised at least £250,000 in equity investment from third party investors in the last 5 years
Full eligibility criteria will be published in due course.
Research and Development
SMEs focusing on research and development will also benefit from £750 million of grants and loans through the Innovate UK’s grants and loan scheme.
Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.
This package builds on the government’s existing support for innovative, high-growth firms including the £2.5 billion British Patient Capital fund, the upcoming £200 million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22 billion by 2024-25.