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Coronavirus Future Fund

Coronavirus Future Fund
  • This scheme will issue convertible loans between £125,000 to £5 million to UK-based innovative companies, subject to at least equal match funding from private investors.
  • These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.
  • The scheme is open for applications until the end of September 2020.

About the Future Fund

  • This will be delivered in partnership with the British Business Bank and launched in May 2020.
  • It will provide UK-based companies with between £125,000 and £5 million from the government, with private investors having to at least match 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. The scale of the fund will be kept under review.
  • Link to the government information is found here


  • UK-incorporated – if your business is part of a corporate group, only the ultimate parent company is eligible
  • Have previously raised at least £250,000 in equity investment from third-party investors in the last 5 years (from 1 April 2015 to 19 April 2020, inclusive)
  • None of the shares are traded on a regulated market, multilateral trading facility or other listing venue
  • Incorporated on or before 31 December 2019
  • At least one of the following is true:
    • half or more employees are UK-based
    • half or more revenues are from UK sales

Key Features of the Scheme

  • Investor-led process – an investor, or lead investor of a group of investors, applies in connection with an eligible company
  • The Future Fund will match 100% of the amount provided by investor(s), up to a maximum of £5m.
  • The Future Fund loan amount provided to the company ranges from £125k to £5m.  Amounts of Future Fund loans must be at least matched by co-investment from investors.
  • Funding must not be used to:
    1. Repay any borrowings;
    2. Pay any dividends;
    3. Pay any bonuses;
    4. Pay any advisory fees.
  • The loans will have a maximum of 8% per annum (non-compounding) interest charge applied.  This interest will be higher if the company and the investor(s) agree between themselves. Unlike a typical bank loan, the interest is not payable on a monthly basis and instead will accrue until the loan converts. At this point, the interest will either be repaid or convert in equity.
  • The loan will mature after 36 months.
  • The loan cannot be repaid early by the company other than with the agreement of all the investors.
  • Conversion – the loans will convert into shares in the company in certain circumstances, including an exit or a new funding round.
  • Standardised terms – Investors and the Future Fund both invest using a convertible loan agreement, which is predefined and cannot be negotiated.
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