Billion pound support package for innovative firms
The government has announced a £1.25 billion support package to help UK businesses driving innovation and development through the coronavirus outbreak.
UK businesses driving innovation and development will be helped through the coronavirus outbreak with a £1.25 billion government support package.
Chancellor of the Exchequer Rishi Sunak said the targeted and tailored help would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
The package includes:
- £500 million loan scheme for high-growth firms, called the Future Fund,
- £750 million of targeted support for small and medium sized businesses focusing on research and development.
The £500 million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis.
“Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis….
This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Rishi Sunak - Chancellor of the Exchequer
- The loan launching in May is delivered in partnership with the British Business Bank
- The fund will provide UK-based companies with between £125,000 and £5 million from the government, with private investors at least matching the government commitment.
- These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid.
- To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.
- The government is committing an initial £250 million in funding towards the scheme, which will initially be open until the end of September, when it will be reviewed.
The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme.
Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million 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 first payments will be made by mid-May.
This package builds on the government’s existing support for innovative, high-growth firms including the £2.5 billion British Patient Capital fund, the upcoming £200 million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22 billion by 2024-25.
- the £500 million Future Fund is comprised of £250 million from government combined with equal match funding from private investors
- further detail on eligibility criteria and fund operation will be published in due course