The British Business Bank has released data on the uptake of the Future Fund after its first month of operation.
The Future Fund provides convertible loans to high growth and innovative 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 was opened to applications on 20 May and is initially planned to run until September 2020.
Since its launch the Future Fund has delivered 252 Government backed loans at a total value of £236.2 million, nearly half the value of the £500 million announced by the Government in April.
The Government has also released important demographic data showing that 45% of the funding provided through the loan scheme has gone to companies outside London, totaling £106 million.
BAME only and mixed ethnicity management teams account for 56% of funding to companies that have been approved for Convertible Loan Agreements so far, worth £118.5m.
Of the 252 companies that have been approved and received their Convertible Loan Agreements for signature, 79% of funding is to companies with mixed gender management teams.
The Future Fund is a signatory to HM Treasury’s Investing in Women Code, and has encouraged 30 venture capital firms and angel groups to become signatories to the Code since the Future Fund was launched.
These are welcome steps and techUK is encouraged by this approach to reporting, allow stakeholders to scrutinise the lending activity of the fund so that it delivers for the sector as a whole.
The speed of the deployment of the Future Fund is commendable. Launched on 20 April it has taken just two months for the Treasury to design the scheme and deliver around 50% of the value of funding promised.
This is a significant achievement and showing how the Government has responded quickly to the impact of the COVID-19 crisis. techUK has worked closely with the Treasury over the course of the COVID-19 crisis to ensure the tech sector is supported.
The Government should continue to monitor the uptake of the future fund and consider an extension of the scheme if there is sufficient demand. The Chancellor has said that he will keep the size of the scheme under review.
techUK would encourage the Government to continue this approach to reporting for the Future Fund. Additional data on how many loans have been rejected or are pending approval would help further improve transparency.
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