The government has announced the £250m Future Fund aimed at helping start up, scale up and venture backed businesses impacted by coronavirus.

The new Future Fund will support innovative UK companies with good potential, that are essential in ensuring the UK retains its world leading position in science, innovation and technology. These companies typically rely on equity investment and are currently affected by Covid-19.

Until now these companies have been unable to access other government business support programmes because they are either pre-revenue or pre-profit. The financing supports companies facing a significantly extended length of time between funding rounds, due to the impact of the current economic situation.

Developed by government and delivered by the British Business Bank, the Future Fund will help these companies through the current period of economic disruption and recovery, so they are able to continue their growth trajectory and reach their full economic potential.

Companies are invited to apply for between £125k and £5m from the fund, but must have lined up matched funding from co-investors (i.e. you must be looking to raise between at least £250k and £10m in total to be eligible for the Government support).

Money received from the Future Fund is to be used by companies for working capital purposes only and will be allocated to those facing financial difficulties due to the coronavirus outbreak.

Eligibility criteria:

• Companies must be UK-incorporated and if part of a corporate group, only the parent company is eligible.
• Companies in receipt of the loans will be required to have previously raised at least £250k in equity investment from third party investors in the last five years.
• Only eligible companies that can attract at least 50% of third-party investment will receive funding.
• Companies cannot have any of their shares traded on a regulated market, multilateral trading facility or other listing venue.
• The company must have been incorporated on or before 31^st December 2019
• At least one of the following must be true for the company:
• • Half or more employees are UK based;
  • Half or more revenues are from UK sales.

This document provides details of the Future Fund Headline Terms.

Similar to the other Coronavirus-inspired loan schemes, the Future Fund will be delivered in partnership with the British Business Bank. The Future Fund will launch for applications on 20th May 2020.

JPP Support

JPP has created a user-friendly tool to help you understand, assess, then apply for and implement the Government's Convertible Loan Notes in a way that is compliant with your existing company structures, boardroom practices and shareholder consent requirements.  Our special JPP Advisory Pack for these convertible loan notes includes:

1. Guide to convertible loan notes - including the top 5 things to look out for. e.g. valuation caps, discount, maturity date
2. Marked up loan note based on UK Government and British Business Bank Term Sheet
3. Board minutes to approve the loan note investment
4. Shareholder resolutions to approve the loan note
5. Cross-checking with existing Articles of Association / existing shareholders agreement and pointing out areas for the company to change to enable the loan note to be executed

This service can normally be provided at a fixed fee.

For more information or to discuss your options please email info@jpplaw.co.uk or book a introductory call via Calendly with Mark Glenister or JP Irvine.

To apply for the Future Fund visit Apply for the coronavirus Future Fund.