Support for innovative companies

The Chancellor has announced a further £1.25 billion business package to support innovative new companies that are not eligible for coronavirus rescue schemes already available.

The government is set to launch a £500m co-investment fund for high-growth companies hit by the crisis with their venture capital backers, matching private sector money with state-backed loans.

Smaller research and development businesses can apply for a new pot of £750m in grants and loans through Innovate UK.

The government's new Future Fund will provide loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors, with the scheme being delivered in partnership with the British Business Bank.

The Government will initially make up to £250m available in total for the scheme, which is now open for applications and will continue until the end of September 2020.

Are you eligible?

To be eligible for a loan from the government under this scheme, a business must be an unlisted UK registered company that has raised at least £250,000 in aggregate from private third-party investors in previous funding rounds in the last five years.

Summary of Loan Characteristics

Here is a summary of what we currently know about this loan:

•    Loan range: £125k to £5m
•    Interest rate 8% pa, deferred until maturity, non-compounding - it can be set at a higher rate if a matched investor agrees a higher rate.
•    Loan term: 36 months
•    Must be matched with a private investment at least of same value, but there is no cap on the amount that a private investor(s) may put in
•    Loan will automatically convert to equity at next ‘qualifying’ funding round at a 20% discount with a ‘repayment right’ applied to accrued interest at a rate equal to a matched private investor.  
•    Qualifying future rounds are those that raise at least as much at the bridging loan.  
•    For non-qualifying rounds, conversion will occur at the discount rate applied to the price set by that round.  
•    At sale or IPO, conversion at the discounted rate set by most recent non-qualifying round may apply or it will be repaid in full with a 100% redemption premium (of the loan principal).
•    On maturity, repayment is due with a 100% redemption premium or an equity conversion at the discounted rate.
•    On a conversion following a sale, IPO or maturity, discount rate will only be applied to a non-qualifying round that occurred after the issue of the bridge funding.
•    Conversion equity will be made in the most senior class of shares in the company.
•    Loans and equity may subsequently by transferred by BBB to an institution investor.

Full details of the Future Fund eligibility criteria and application process is available by clicking here.

Get In Touch

Please get in touch if you want to talk more about how we can help you.
We offer an initial consultation free of charge which gives us the chance to meet and discuss your needs, with no obligation.

Accountants in Solihull

Lumaneri House, Blythe Gate, Blythe Valley Park, Solihull, B90 8AH

0121 693 5000

Accountants in Bromsgrove

Five Mile House, 128 Hanbury Road, Stoke Prior, Bromsgrove, B60 4JZ

01527 833124

Jerroms is a trading style of both Jerroms Business Solutions Limited 08923059 and Jerroms (Bromsgrove) Limited 08433008.
Registered office for each of these companies is: Lumaneri House, Blythe Gate, Blythe Valley Park, Solihull, B90 8AH