21 Apr 2020
Over a billion pounds will be directed to startups and small and medium-sized firms to support growth and innovation through the Coronavirus crisis.
The Government will provide help fast-growing companies access up to £500million of loans between £125,000 and £5million as it fights to protect the innovative firms that will drive the future UK economy.
Rishi Sunak said the targeted and tailored help would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
The £500million loan scheme, called the Future Fund, will be delivered alongside a further £750million of targeted support for small and medium-sized businesses focusing on research and development.
The £500million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis.
Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5million from the government, with private investors at least matching the government commitment.
These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.
The government is committing an initial £250million in funding towards the scheme, which will initially be open until the end of September. The scale of the fund will be kept under review.
The £750million of targeted support for the most R&D intensive small and medium-sized firms will be available through Innovate UK’s grants and loan scheme.
Innovate UK, the national innovation agency, will accelerate up to £200million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis.
An extra £550million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.
This package builds on the government’s existing support for innovative, high-growth firms including the £2.5billion British Patient Capital fund, the upcoming £200million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and major commitments to increase public R&D spending to £22billion by 2024-25.
Further details on eligibility for the scheme will be announced in due course.
In the meantime, Aberdein Considine’s Corporate & Business Advisory team can offer support in a number of ways, from helping you understand the scheme in more detail and keeping you updated as more details are announced.
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