£1.25 Billion for Innovative and Research Intensive Businesses Impacted by COVID-19
A £1.25 billion government support package has been announced for innovative new companies that have been impacted by coronavirus (COVID-19) and are not eligible for existing coronavirus rescue schemes.
The package includes a £500 million investment fund, called the Future Fund, for high-growth companies across the UK to receive the investment they need to continue during the crisis. It is made up of funding from government and the private sector. A £750 million package of targeted support for the most research and development (R&D) intensive small and medium-sized firms will be also available through Innovate UK’s grants and loan scheme.
The Future Fund 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. 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. 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.
Innovate UK will accelerate up to £200 million of grant and loan payments for its 2,500 existing customers on an opt-in basis. An extra £550 million will 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 IUK funding. The first payments will be made by mid-May.
To be eligible for the Future Fund, 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.
Chancellor of the Exchequer Rishi Sunak, said: "Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis.
'This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity."
This scheme is not available yet. It will launch in May 2020 and is initially due to run until the end of September 2020.