The British Business Bank has published further details of the Future Fund. The Future Fund provides tailored financial support to high growth and innovative UK companies as they seek to navigate the economic downturn caused by the outbreak of COVID-19.
The scheme provides convertible loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. The minimum aggregate loan amount is £250,000, while the maximum amount from the Government matched loan is £5 million. There is no cap on the amount that the matched investors may loan to applicants.
The scheme will be open to applications from Wednesday 20 May and is initially planned to run until September 2020.
The Government has made £250 million available for the Future Fund, bringing the total alongside matched investors to at least £500 million. However, the total amount contributed by the Government will remain under review with the possibility that the scheme will be expanded if there is sufficient uptake.
The Government’s business interruption loan scheme announced by the Chancellor in April was quickly found to be ill-fitting to innovative UK businesses who were often pre-profit, high-growth and venture backed. Since then, techUK has worked closely with the Treasury to demonstrate the need for the Future Fund and to ensure that it is available to the maximum number of innovative companies.
We are pleased that between the outline of the headline terms on 20 April and the final eligibility criteria the Treasury and the British Business Bank have sought to widen the scope of the scheme to include an increased variety of tech sector firms and investors.
This commitment to diversity is important, as for the economic recovery to be successful the UK will need a dynamic and inclusive tech sector. techUK also welcomes the Future Fund becoming a signatory to HM Treasury’s Investing in Women Code, and encouraging its partner Angel Syndicates, Venture Capital firms and Banks to also sign the code.
While the Future Fund is not fully compatible with the Enterprise Investment Scheme (EIS) the Government has said that it will amend the rules to protect Future Fund investors from losing relief on previous investments through EIS made prior to any investment through the Future Fund.
The Treasury will publish statistics on uptake of the fund and techUK will monitor uptake to ensure that the benefits of the scheme are accessible to the widest range of eligible companies.
Information and FAQs regarding the Future Fund:
We will continue to provide updates as more information becomes available, so please regularly check techUK’s COVID-19 information hub.
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