April 21, 2020 @ 11:38 by Richard Dawson
Recognising the need to support early stage start-ups and those companies driving innovation in the UK, Chancellor Rishi Sunak yesterday (April 20) announced the introduction of the coronavirus Future Fund.
The Future Fund will provide Government loans to UK companies ranging from £125,000 to £5 million, providing there is at least equal match funding from private investors.
The scheme is designed to ensure that companies with high-growth potential have access to enough investment to operate during the coronavirus pandemic, where other sources of funding may become scarce.
Launching in May 2020, the Future Fund commits Government to an initial £250 million, but the Chancellor has said that this will be kept under review, indicating that more money could be made available if necessary.
This will provide a lifeline to those start-ups who have the capacity to become big businesses, driving innovation and creating jobs in the future.
Delivered by the British Business Bank, funds will only be made available at a level which can be matched by third-party investors and institutions.
For example, if a start-up wants to access £1 million, it would have to evidence that it has already raised £1 million from private investors to be eligible.
The scheme is designed for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme (CBILS).
Suren Thiru, head of economics at the British Chambers of Commerce, said: “The Future Fund will help provide urgently needed support for many of our most innovative and fast growing businesses around the UK, as we have urged.
“The fund fills an important gap in existing government support and could make a real difference to entrepreneurial firms navigating challenging circumstances.
“It’s crucial that this enhanced support reaches companies in difficulty as quickly as possible.”