The UK Government has unveiled a new £1.25bn Future Fund, which will be delivered in partnership with the British Business Bank.
The fund, which will be run until at least the end of September, is designed to ensure that early stage enterprises receive enough investment to remain viable during the Coronavirus crisis.
Launching in May 2020, the Future Fund will make Government loans available to eligible UK-registered companies. The loans will range between £125,000 to £5m and will be subject to at least equal funding from private investors.
The fund has been labelled as a package to support ‘innovative new companies not eligible for existing coronavirus rescue measures’. The Government 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.
The Government terms the financial support as “unsecured bridge funding available alongside other private third-party matched investors,”. Consequently, the Government-backed element will comprise no more than 50% of the total bridge funding provided to the company. The remaining amount will be provided by matched investors.
Eligibility for the Future Fund
The Government will publish full eligibility criteria in due course. However, according to information published by the Government so far, companies will be eligible if the following conditions apply:
- your business is based in the UK;
- your business can attract the equivalent match funding from third party private investors and institutions; and,
- your business has previously raised at least £250,000 in equity investment from third party investors in the last five years.
Further details provided in an accompanying PDF state that if the company is a member of a corporate group, only the ultimate parent company (if it is a UK-registered company) will be eligible to receive the loan.
Chancellor, Rishi Sunak, commented: “Our start-ups and businesses driving research and development are one of our great economic strengths,…”
“This new fund will mean they can access the capital they need…to continue to create new ideas and spread prosperity,”.
How can George Hay help?
We know that the coming weeks and months are going to be challenging for many businesses and employers. Though we have adapted some of our working practices in response to the outbreak, we are still contactable and urge you to keep communicating with us during this period of uncertainty.
Information is correct at time of writing (22/04/2020). Please keep an eye on our dedicated Coronavirus page, for the very latest news as we endeavour to cover the key issues affecting you and your business at this time. More information and advice is available on the Gov.uk website.