Government announces start-up support plan
The Chancellor Rishi Sunak has announced a £1.25bn support package for start-up and tech-driven companies who may be unable to access the existing COVID-19 support measures.
Start-up innovative businesses can often be high-growth but loss-making, meaning they are not eligible for some of the existing support packages. However, the Government sees such innovation as vital to drive UK growth after the crisis.
The package includes a £500m co-investment fund (the “Future Fund”) for high-growth companies hit by the crisis, which will match third party investment with Government funds.
A separate £750m scheme through Innovate UK will provide loans and grants to small and medium sized companies who are heavily R&D driven. The Treasury said “Innovate UK will accelerate up to £200m of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550m 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 “Future Fund”, due to launch in May 2020, will issue convertible loans between £125,000 to £5 million to companies which are facing financing difficulties due to the coronavirus outbreak. £250m will initially be made available by the Government.
Eligibliity will be restricted to unlisted UK based businesses, which have previously raised at least £250,000 in equity investment from third party investors in the last 5 years, and can match the Government’s funding with funding from third party private investors and institutions. The scheme will be delivered in partnership with the British Business Bank.
See the headline terms on the Gov.uk website.Talk to Barnes Roffe today