The government’s £500 million Future Fund opens for applications today, with innovative and high-growth British businesses being able to secure investment to help them through the Coronavirus outbreak.
UK-based companies can now apply for a convertible loan of between £125,000 and £5 million, to support continued growth and innovation in sectors as diverse as technology, life sciences and the creative industries.
The Future Fund is open to UK-based firms that have half or more of their employees based in the UK or generate at least half of their revenue through UK sales. The firms must have previously raised at least £250,000 in equity investment from third parties in the last 5 years. Private investors – potentially including venture capital funds, angel investors and those backed by regional funds – will at least match the government investment in these companies.
Companies can check they meet the criteria for funding by going to the British Business Bank website. If they have secured private match funding, one of their investors can register online to start the application process.
“UK Business Angels Association congratulates the Government for bringing this important initiative so rapidly into the market,” Jenny Tooth OBE, CEO of UK Business Angels Association (UKBAA), said. “The Future Fund responds to the needs of innovating growth focused businesses that may have had investment from angel investors in their early growth stages and now have the capability to benefit from the support of a Convertible Loan alongside VC investment.”
The loans received via the Future Fund will convert to equity if not repaid.
The government has made an initial £250 million available for investment through the scheme and will consider increasing this if needed.
“Britain is an innovation powerhouse, and helping our cutting-edge companies of the future get the cash they need during this difficult time is a vital part of getting the UK economy up and running again.”
– Business Secretary Alok Sharma
Match fund investors will be encouraged to sign the Treasury’s Investing in Women Code, which commits firms to improving female entrepreneurs’ access to tools, resources and finance. The Future Fund is a signatory of this.
The government will also amend the rules of the Enterprise Investment Scheme, which provides tax relief to investors in high growth firms, to protect Future Fund investors from losing relief on their previous investments made prior to any investment through the Future Fund.
“Our start-ups and innovative firms are one of our great economic strengths, and they will help spur our recovery from the pandemic,” The Chancellor of the Exchequer, Rishi Sunak, said. “The Future Fund will support firms across the UK to get through the pandemic by stimulating investment, so that they can continue to break new ground in technology and innovation.”
The Future Fund is an important initiative and takes us another step forward in meeting the needs of the UK’s scaleups at this time, who employ 3.5m people across all industry sectors and regions. “We welcome the streamlined and investor-led process which will enable swift execution, getting money out as quickly as possible across the country,” Irene Graham, CEO of the ScaleUp Institute, said.
The Fund will be open until September and is delivered in partnership with the British Business Bank.
In addition to the Future Fund, Ministers have allocated £40 million through the Fast Start Competition to drive forward new technological advances, and to support innovative start-ups, including a virtual-reality surgical training simulator and an online farmers’ market platform. This will give companies a vital boost, fast-tracking the development of innovations borne out of the coronavirus crisis.
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