Government support for fast-growth startups who are affected by Coronavirus
The government has announced a new scheme, launching in mid-May, to support fast-growth companies affected by the Coronavirus who may not be eligible for the Coronavirus business interruption loan scheme – namely, those not profitable enough to support repaying a loan.
The scheme, called the future fund, is aimed at venture capital-backed start-up and scale-up companies, often who are currently, or have recently been, loss-making. It is mainly, but not exclusively targeted, at the technology sector.
The scheme, subject to eligibility criteria, will provide UK-registered companies with government loans – in the form of convertible loans – ranging from £125,000 to £5 million, subject to at least equal match-funding from private investors. When the loan matures, the company pays the government 8% (minimum) a year (non-compounding) interest, either in cash or via equity conversion.
Businesses can apply if they have an independent home base in the UK, are not listed on the London Stock Exchange and have raised at least £250,000 in total from private third-party investors since 2015. Current details of the scheme are available here with further details due before its launch.
As well as the future fund, businesses might also be able to access the Coronavirus job retention scheme.
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