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Companies that secure private investment can now attract up to £5m on a matched basis from the government’s Future Fund which opened on 20 May 2020. The Future Fund will provide government loans to UK-registered companies ranging from £125,000 to £5m, subject to at least equal matched funding from private investors. The fund has been badged as a package for innovative early stage companies not eligible for existing coronavirus support and will be delivered in partnership with the British Business Bank. The scheme will run until at least the end of September.

Purpose and form of funding

To provide working capital to certain companies which are facing financing difficulties due to the coronavirus outbreak, to help them continue to grow. The funding will be in the form of convertible loans from £125k to £5m, subject to at least equal matched funding from private investors.


How it works

The Future Fund is operated by the British Business Bank, and applications are made via the Future Fund portal on the British Business Bank’s website.
Eligibility criteria apply to the company and its private investor(s).
The application process is investor-led:

  • the investor applies in connection with a company
  • the company confirms the investment application details and submits a full application
  • on approval, the parties execute an agreement and satisfy the conditions for funds to be released

The company and the investor may each engage a solicitor in connection with the application. The role of the solicitor is explained by the British Business Bank.

Standard scheme documentation is set out by the British Business Bank.

Main terms

Loan size: from £125k to £5m providing matched by private investors

Term: 36 months, with early repayment only with the agreement of all investors

Interest rate: minimum 8% pa (non-compounding). Interest is not payable monthly but accrues until the loan converts. The accrued interest will either be repaid or converted into equity

Conversion: the loan will convert into shares in the company in certain circumstances

Repayment: if the loan is repaid rather than being converted into equity then a 100% redemption premium will be payable

Standardised terms: the agreement is predefined and cannot be negotiated

Use of proceeds: restrictions apply


Eligible investors

Each investor must fall within certain defined categories in the FCA’s handbook of rules and guidance, or in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.
Full details and FAQs for investors are available from the British Business Bank


Eligible companies

A company that can participate will

  • be UK-incorporated and, if part of a corporate group, must be the parent company;
  • have raised at least £250k in equity investment from third-party investors in the period 1 April 2015 to 19 April 2020 inclusive;
  • have none of its shares are traded on a listing venue; and
  • have been incorporated on or before 31 December 2019.

At least one of the following will be true about the company:

  • half or more employees are UK-based
  • half or more revenues are from UK sales

Further details and FAQs for companies are available from the British Business Bank

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