UK government announces £1 billion support package for startups

The Future Fund will issue convertible loans from £125,000 to £5 million

The UK government has announced a billion-pound support package for small and medium-sized businesses focusing on research and development.

The package, which includes a new £500 million loan scheme and £750 million of targeted support, will come as a lifeline to small and newly-founded companies that are not eligible for the Coronavirus Business Interruption Loan Scheme.

Startups are rarely profitable, which makes them ineligible for the government's emergency loan scheme. 

The Future Fund will issue convertible loans of between £125,000 and £5 million to UK-based businesses that have managed to raise at least £250,000 in equity investment from third-party investors in the last five years.

Applicants should be aware that any money provided by the government via the Future Fund must be matched by private investors. Moreover, businesses which fail to repay the loan will have their ownership stake taken over by the government.

Chancellor Rishi Sunak described startups and R&D businesses as “one of our great economic strengths” which “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," he said.

Tech Nation chief executive Gerard Grech said that the government's next priority should be focusing on ways to target the money effectively.

“Startups and scale-ups vary in their financial structuring and their regional location. It will be important to get the balance just right, across the UK and also across the different models of investments, from angel invested companies to VC-funded firms,” he said.

“The UK’s tech sector has achieved a huge amount in the past 10 years. In 2019, a staggering 33% of all European tech investment was in the UK - the third highest in the world. We must keep building on this success story.”

The Future Fund is set to launch in May 2020. Further details on how to apply will be published in due course.

Featured Resources

Managing security risk and compliance in a challenging landscape

How key technology partners grow with your organisation

Download now

Security best practices for PostgreSQL

Securing data with PostgreSQL

Download now

Transform your MSP business into a money-making machine

Benefits and challenges of a recurring revenue model

Download now

The care and feeding of cloud

How to support cloud infrastructure post-migration

Watch now

Recommended

Neo digital transformation
digital transformation

Neo digital transformation

9 Apr 2021
Onboarding during the pandemic and beyond
recruitment

Onboarding during the pandemic and beyond

25 Mar 2021
Fake COVID vaccination certificates available on the dark web
hacking

Fake COVID vaccination certificates available on the dark web

23 Mar 2021
10 learnings to consider when it comes to enterprise mobility
Business strategy

10 learnings to consider when it comes to enterprise mobility

23 Mar 2021

Most Popular

Microsoft is submerging servers in boiling liquid to prevent Teams outages
data centres

Microsoft is submerging servers in boiling liquid to prevent Teams outages

7 Apr 2021
Data belonging to 500 million LinkedIn users found for sale on hacker marketplace
hacking

Data belonging to 500 million LinkedIn users found for sale on hacker marketplace

8 Apr 2021
Hackers are using fake messages to break into WhatsApp accounts
instant messaging (IM)

Hackers are using fake messages to break into WhatsApp accounts

8 Apr 2021