The Future Fund, which offers convertible loans of between £125,000 and £5 million to innovative companies facing financial difficulties as a result of the COVID-19 pandemic has opened.
The fund is designed to support UK-based companies that have acquired at least equal match funding from private investors.
Aimed specifically at businesses that typically rely on equity investment, the fund is a lifeline for firms that cannot access other forms of Government business support because they are either pre-revenue or pre-profit-based.
To be eligible a business must:
- be UK-incorporated – if a business is part of a corporate group, only the parent company is eligible
- have raised at least £250,000 in equity investment from third-party investors in the last five years
- not had any of its shares traded on a regulated market, multilateral trading facility or other listing venue(s)
- have been incorporated on or before 31 December 2019.
Businesses will also need to demonstrate that at least one of the following is true:
- half or more employees are UK-based
- half or more revenues are from UK sales.
As part of the introduction of the fund, the Government will also amend the rules of the Enterprise Investment Scheme (EIS), to protect Future Fund investors from losing tax relief on their previous investments made prior to any investment through the Future Fund.
The Government has also allocated £40 million alongside the Future Fund via the Fast Start Competition. This is intended to drive forward new technological advances and support innovative start-ups that are fast-tracking the development of innovations borne out of the Coronavirus crisis.
The Future Fund is being delivered by the British Business Bank and will remain open until September.
A Convertible Loan Agreement has been created for those who intend to apply, which can be found here. Further details of this loan scheme and how to apply can be found on the British Business Bank website.