Rishi Sunak announced last night (20 April 2020) the launch of two new funds; The Future Fund, to provide matched funding in the form of convertible loans of between £125k and £5m to UK registered early stage companies. £250m is being made available to the Future Fund. £550m is also being made available to customers of Innovate UK, the national innovation agency and the agency will accelerate a further £200m of grant and loan payments to its customers.
These announcements look beyond initial preservation funding through the CJRS and CBILS schemes to the future, in an attempt to reverse the economic nose dive which has occurred since the start of lockdown.
As the Chancellor said, ‘It is critical that we don’t just maintain companies and jobs that already exist but we must also encourage businesses, jobs and technologies of the future. Innovation and entrepreneurship have powered growth in our country for centuries and it is what will drive our growth as we recover from this crisis.’
As with all government schemes announced during the crisis the devil will be in the detail, but you can keep up to date by following Mercer & Hole’s COVID-19 Business Support Hub.
An initial paper on the Future Fund can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880119/Convertible_Loan_Key_Terms_-__Final_Version_.pdf and the government’s news story is at https://www.gov.uk/government/news/billion-pound-support-package-for-innovative-firms-hit-by-coronavirus.
If you think we may be able to help you access the financial measures available or advise you about your company continuing to trade, please do not hesitate to contact our Corporate Restructuring team have a wealth of experience in helping rescue distressed businesses, as set out in our business rescue case studies.