Government launches plans to support struggling UK SMEs

Future Fund

The Chancellor has announced the launch of the Future Fund, the scheme will issue convertible loans between £125,000 and £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.

The scheme will launch in May 2020.

The government loans to UK-based companies will be subject to at least equal match funding from private investors. The loans will convert to equity stakes (valued at a discount) if not repaid.

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.

The scheme will be delivered in partnership with the British Business Bank although this institution has struggled with the roll out of CBILS.

Eligibility

You’re eligible If:

• your business is based in the UK
• your business can attract the equivalent match funding from third party private investors and institutions
• your business has previously raised at least £250,000 in equity investment from third party investors in the last 5 years

Full eligibility criteria will be published in due course.

Convertible Loan Agreement

£750 million of R&D support

The chancellor has also said that £750m will be available through grants and loans from Innovate UK, the national innovation agency, with the majority available to its 2,500 existing customers. The first payments will be made by mid-May.

If you have concerns or questions, please contact us on 01932 830664 or through your usual client partner contact. As further details are announced, we will keep you informed.

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