19 May 2020
State support of up to £250m now available to innovative UK companies
B P Collins’ corporate and commercial team is offering help and advice on the funding application process, which opens on Wednesday 20 May, and on the scheme documentation and settlement process for successful applicants.
Innovative UK companies struggling to survive the lockdown will now be able to access state support with the launch of a £250m co-investment “Future Fund,” which will be overseen by a state backed group, the British Business Bank. The final terms of the scheme have now been announced ahead of the website opening for applications on Wednesday 20 May 2020. The fund will offer from £125,000 up to £5 million in government loans subject to at least equal matched funding from private investors.
The government is set to have an interest in some of the UK’s most promising businesses under the scheme, which will enable bailout loans offered by the Treasury to be changed into equity. The scheme is currently due to last until September 2020 and funding will be issued on a first come first served basis. However, the Chancellor has stated that he would be ‘more than happy’ to expand the scheme if demand exceeded the money available.
The British Business Bank explains:
“The Future Fund issues convertible loans to innovative UK companies with good potential, that typically rely on equity investment and are currently affected by Covid-19. The scheme, will help these companies through the current period of economic disruption and the recovery, so they are able to continue their growth trajectory and reach their full economic potential.”
How will it work?
- Financing will be unlocked by additional third-party investment on a match funded basis.
- Applications submitted via an online platform based on a set of standard terms and eligibility criteria.
The British Business Bank has outlined the eligible criteria for companies wishing to apply:
- Companies must be UK-incorporated and if part of a corporate group, only the parent company is eligible.
- Companies in receipt of the loans will be required to have previously raised at least £250k in equity investment from third party investors in the last five years.
- Only eligible companies that can attract at least 50% of third-party investment will receive funding.
- Companies cannot have any of their shares traded on a regulated market, multilateral trading facility or other listing venue.
- The company must have been incorporated on or before 31st December 2019.
- At least one of the following must be true for the company:
- Half or more employees are UK based;
- Half or more revenues are from UK sales.
B P Collins’ corporate and commercial team is already helping UK start-ups to apply for funding. If you need advice, please contact partner Alex Zachary at email@example.com or 01753 279052 immediately as funding will be issued on a first come first served basis.