The Chancellor has announced a two-part support package for ‘innovative firms’, which means mainly start-ups and other venture capital backed business that would be unable to raise CBLIS or CLBILS finance.
The Future Fund will launch in May and be delivered with the British Business Bank. The fund will provide loans between £125,000 and £5 million, 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 and UK based company that has previously raised at least £250,000 in equity investment from third party investors in the last five years. To begin with the government is committing £250 million to the scheme. It will initially be open until the end of September, with its scale kept under review.
Up to £750 million of targeted support for the most R&D intensive small and medium size firms will be made available through a grants and loan scheme operated by Innovate UK, the national innovation agency.
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 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.