New £1.25bn package for innovative firms
The government has announced a new £1.25bn scheme to help innovative firms survive the coronavirus pandemic.
The package is made up of:
- £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector, called the Future Fund.
- £750 million of grants and loans for SMEs focusing on research and development.
The £500 million Future Fund will be delivered in partnership with the British Business Bank and launched in May. The loans will provide between £125k and £5m from the government, 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. Qualifying businesses must be an unlisted UK registered company that has raised at least £250k in equity investment in the past five years. The government is committing £250 million in funding towards the scheme, which will initially be open until the end of September.
The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme. This will include up to £200 million of grant and loan payments for its 2,500 existing Innovate UK 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 are expected to be made by mid-May.