The Future Fund, announced by the Chancellor on 20 April, opened for applications today. The scheme, for which the Government has initially made £250 million available, will issue convertible loans to UK fast-growth companies that ordinarily rely on equity investment and are currently affected by Covid-19. The scheme is being delivered through the British Business Bank.
An investor, or lead investor of a group of investors, may make an application in respect of an investment in an eligible company. The Future Fund will match up to 100% of the amount provided by investor(s), up to a maximum of £5 million. Funding must not be used to (a) repay any borrowings; (b) pay any dividends; (c) pay any bonuses; (d) pay any advisory fees.
Investors and the Future Fund both invest using a convertible loan agreement, which is pre-defined and cannot be negotiated. The loans will convert into shares in the company in certain circumstances, including an exit or a new funding round. The loans will convert into shares in the company in certain circumstances, including an exit or a new funding round.
There are eligibility criteria for both the company and the investors.
Further information can be found on the British Business Bank website.
"The scheme, will help these companies through the current period of economic disruption and the recovery, so they are able to continue their growth trajectory and reach their full economic potential. The scheme is designed by government and delivered by the British Business Bank"