The government has announced further measures to help innovative companies remain viable during the coronavirus crisis.
The “Future Fund” is designed to ensure high-growth companies receive enough investment to remain viable. It will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. The scheme will be delivered in partnership with the British Business Bank and will launch in May 2020.
These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.
Initially, the U.K. government is pledging a total of £250 million of taxpayer’s money to the new fund, but it has also said that the scale of the fund will be kept “under review,” suggesting more taxpayer money could be committed in future.
You are eligible if:
- your business is based in the UK
- your business can attract the equivalent match funding from third party private investors and institutions
- your business has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years
Full eligibility criteria will be published in due course. There is some confusion as to how these convertible loans will work in practice. The government will be publishing more detail and clarification in due course, In the meantime, the headline terms setting out the main features expected to apply to the loans can be found by here.
Image by Gerd Altmann from pixabay