Last month the Government announced the outline of a new £250m loan (total £500m support package), the Future Fund, to support innovation and R&D businesses during the pandemic.
More details have now been announced and applications are set to open tomorrow (Wednesday 20 May) via British Business Bank.
The Future Fund will issue convertible loans to innovative UK companies (see eligibility criteria), with good potential, that typically rely on equity investment and are currently affected by Coronavirus. The scheme will help these companies through the current period of economic disruption and the recovery, so they are able to continue their growth and reach their full potential.
Loan amounts range from £125k to £5m and must be at least matched by funding secured by investors. Loans have a minimum interest rate of 8% and a term of 3 years. The scheme will be open until September 2020.
This is an element of the Government getting involved in Private Equity ventures, as well as providing valuable support, where we would expect a number of the loans to end up being converted to equity.
One point to note, applications for the Future Fund may be limited, due to the requirement to already have investors on board.
In order to apply, the company must meet the following eligibility criteria:
- Raised at least £250,000 in equity from third-party investors in the last 5 years
- If the company is a member of a corporate group, it must be the ultimate parent company
- The company does not have any of its shares or other securities listed on a regulated market, a multilateral trading facility, a recognised investment exchange and/or any other similar market, stock exchange or listing venue
- Be a UK incorporated limited company (on or before 31 December 2019)
- At least one of the following must be true for the company:
- Half or more employees are UK based
- Half or more revenues are from UK sales
If you would like us to support you in a Future Fund application, or to find out more about support for R&D and innovation businesses, please contact us on 01202 717867 or email and we’ll gladly arrange a call with you to discuss in more detail.