Today the UK government announced a £1.25 billion package to support innovative UK businesses.
The package includes a Future Fund of £250m of taxpayer money for startups. The fund will issue convertible loans, that need to be matched by the private sector, creating a £500m resource.
The Future Fund will be delivered in partnership with British Business Bank and offer startups bridging loans of between £125,000 and £5m.
To be eligible the company must have raised £250,000 privately in the last five years. If the money is not repaid, the government will take an ownership stake in the company.
The scheme will open in May and initially run until the end of September. The Treasury has yet to publish all the criteria needed in order to apply, current details here.
The second part of the package announced is £750m in grants and loans for smaller businesses focused on research and development. The support will be available through Innovate UK’s grants and loan scheme.
Innovate UK, the national innovation agency, will accelerate 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 will be made by mid-May.
“Our startups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis," Chancellor Rishi Sunak said.
“This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Jon Hope, Co-Founder Barclays Eagle Labs said: “The Future Fund is a big deal for the startup sector. Ahead of the launch in May, Eagle Labs will be developing a programme of support to help our members better understand and access the scheme and as well as the existing Innovate UK grant and loan opportunity.”