Innovative companies can now apply for a convertible loan – which will convert to equity if not repaid – of up to £5 million to support growth and development, it has been announced.
Known as the Future Fund, the multi-million-pound finance facility is designed to support diverse sectors, such as technology, life sciences and the creative industries, as well as female entrepreneurs.
The Government will put forward an initial £250 million for investment in early-stage start-up businesses, providing it is matched by private investors, such as venture capital funds and angel investors.
The Government says it will also amend the rules of the Enterprise Investment Scheme (EIS) – which provides tax relief to investors in high growth firms – to “protect Future Fund investors from losing relief on their previous investments made prior to any investment through the Future Fund”.
It is believed that the Future Fund will be open until September, initially offering loans of between £125,000 and £5 million.
To qualify, your business must have previously raised at least £250,000 in equity investment from third parties in the last five years, and have half or more of their employees based in the UK or generate at least half of their revenue through UK sales.
Welcoming the scheme, Kate Boguslawska, Commercial Solicitor and Partner at Carter Lemon Camerons LLP, said: “The proposal of the Future Fund will give the much-needed boost to start-ups and existing companies.
“I am glad that the government is backing FinTech companies and that it recognised the need for diversity on the market by opening the Fund to female entrepreneurs.
“Whilst we are observing a rise in female-owned and led companies, they are still in the minority. The Future Fund will help reduce this gap in the market and is likely to encourage more women to become entrepreneurs.”
For support accessing corporate finance, please get in touch with our expert team today.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.