The Government has unveiled a new £1.25bn package designed to support early stage innovative new companies that are not eligible for existing coronavirus rescue measures.
The fund will match up to £250m of private investment and add £750m to an existing loan and grant scheme for smaller firms that focus on research and development.
Titled, The Future Fund, this new funding will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme (CBILS).
The Future Fund is to be launched in May 2020 and will be delivered in partnership with the British Business Bank.
Those businesses seeking investment via the fund will need to be:
- based in the UK
- able to attract the equivalent match funding from third-party private investors and institutions
- able to demonstrate that they have previously raised at least £250,000 in equity investment from third-party investors in the last 5 years
The full eligibility criteria will be published shortly.
The government will also provide further assistance in the form of £750m of grants and loans from Innovate UK, the country’s government research and development support agency. Funds will predominantly be available to Innovate UK’s 2,500 existing customers and the first payments will be made in mid-May.