Future Fund Extended

HM treasury

The chancellor is expanding a £500m fund for UK startups hit by the coronavirus crisis, to ensure firms that shifted their headquarters abroad can still access the scheme. The Future Fund will now benefit companies that are seen as British in all but name.

 

Applicants will still have to prove that at least half of their staff are based in the UK and that they make at least 50% of their revenues from UK sales.

 

The changes come amid a surge in demand for the scheme, which will see the government take stakes in British startups that struggle to repay loans due to the coronavirus crisis.

 

The Future Fund offers convertible government loans worth between £125,000 and £5m to companies that have previously raised at least £250,000 of equity investments. Those loans are matched pound-for-pound by private investors, but the government debt will convert to equity if the loans are not repaid.

 

The fund is meant to help startups, in sectors like tech and life sciences, that may have otherwise struggled to survive, let alone grow, throughout the coronavirus crisis. The government initially committed £250m in loans as part of a £500m fund that was equally shouldered by private investors. However, the government has now approved £320m worth of future fund loans to more than 320 early-stage firms.

 

Government data showed that banks had approved more than 1m loans worth £42.9bn as of 28 June. More than 1.3m businesses have applied.