Topic: Coronavirus 

Future Fund: Support for Start-ups

By Daniel Hildebrand

23 Apr 2020

The COVID-19 outbreak has brought yet more uncertainty for businesses, making it hard, if not impossible, to plan for the future. In the chaos of the crisis, businesses have had to adapt to survive whilst setting up for an unpredictable future.

No one knows what the UK, let alone the world, will look like after this crisis. To support businesses now, the government has announced several schemes to reduce the economic impact of this disruption.

The ‘Future Fund’ is the latest scheme released by the government this week. Opening in May 2020, it is aimed at the most innovative start-up companies whose ability to attract investment has been hampered as liquidity dries up. The scheme will be running initially to the end of September, in partnership with the British Business Bank.

The launch of a new £500 million co-investment fund for such high-growth companies is a welcome stimulation for private investment. State-backed loans between £125,000 and £5 million are being promised for eligible businesses as long as the cash is at least matched by private investors.

To access the loans, certain qualifying criteria need to be met, including:

  • Being an unlisted UK-based business 
  • Being able to attract the equivalent match funding from third-party private investors or institutions
  • Having previously raised at least £250,000 in equity investment from third-party investors in the last five years

The loans will be for a term of no more than 36 months and will attract an 8% interest rate per annum. If at the end of the 36-month period the loan has not been repaid, then the loan will automatically convert into an equity in the start-up business at a 20% discount to the valuation set at its next funding round.

The government will also be providing further assistance to the country’s research and development businesses in the form of grants and loans as part of a £750 million fund. This will initially be made available to Innovate UK’s existing customers who make up some of the country’s most dynamic businesses within the economy.

From the tech industry through to biochemists, the scheme is designed to enable those at the forefront of innovation to continue to drive UK growth and look beyond the current economic climate to a brighter future.

For more information about the future fund and whether your business is eligible, contact Daniel Hildebrand at

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