Encouraging innovation: £500m ‘Future Fund’ open for applications to support growth in diverse sectors
21st May 2020
Applications opened yesterday (20 May) for the £500m Future Fund, which offers convertible loans to innovative UK companies that typically rely on equity investment and are currently affected by the pandemic.
Unlike the CBILS, this application process is investor-led, therefore an investor, or lead investor of a group of investors, applies in connection with an eligible company.
The key features of the fund:
Successful applicants will receive a convertible loan, where the loan will convert into shares in the company in certain circumstances, including an exit or a new funding round once the loan has matured, between £125,000 and £5 million
The loan will mature after 36 months
The amount of the Future Fund loan must be at least matched by co-investment from investors.
The loans will have a minimum of 8% per annum (non-compounding) interest charge applied.
Applications are open now until the end of September 2020
There is a list of criteria that both the investor and the company must meet in order to be eligible for the scheme. Further details of these can be found on the British Bank website here.
Chancellor, Rishi Sunak, said:
“Our start-ups and innovative firms are one of our great economic strengths, and they will help spur our recovery from the pandemic.
“The Future Fund will support firms across the UK to get through the pandemic by stimulating investment so that they can continue to break new ground in technology and innovation.”