Posted by Bharti Moore, Senior Associate
Future Fund Expansion: UK open for business
Since its launch in May 2020, the Future Fund has proven to be extremely popular, with applications in excess of the initially funding commitment of £250million.
On 28 June 2020, the UK Government announced that a total of 674 applications for the scheme were received and 322 companies have benefited from £320.6 million in Future Fund support.
Effective from 30 June 2020, the UK Government announced that the eligibility criteria will be expanded to include companies who have participated in an overseas accelerator programmes. As part of such programmes, it is often a requirement to have a parent company outside of the UK. Therefore many companies who had participated in accelerator programmes were not initially eligible to apply for the Future Fund.
These companies will still be required to meet the all the other eligibility criteria for the Future Fund, including equity rising of at least £250,000 in the last five years, the matched investment from third party investors, the ‘substantive economic presence’ tests that half or more employees are UK-based and/or half or more revenues are from UK sales etc.
UK open for business
Many accelerator programmes are highly selective and give businesses access to finance, mentorship and expert networks. This expansion recognises the vital role that innovative and robust start-ups and scale-ups can play in driving growth as the UK economy seeks to pull through from the pandemic.
The Chancellor of the Exchequer, Rishi Sunak, said; “This change means that those start-ups who have strived to be the very best, and taken opportunities to grow their business, will be able to benefit from our world-leading Future Fund.”
The Business Secretary Alok Sharma said; “Our decision to relax this rule recognises the importance of many of the UK’s most cutting-edge start-ups as we bounce back from coronavirus.”
This is a clear nod that the UK is open for business and the UK government are keen to support innovative companies to thrive and flourish.
How can we help
We are well-versed in advising clients in respect of convertible loan notes. We have already been advising clients in relation to eligibility for the Future Fund, the application process, the required consents and approvals and the terms of the scheme. We are therefore well placed to support Companies interested in participating in the Future Fund. If you have any questions, please get in touch with our Corporate Team, we can support you to navigate through the application process smoothly.
For more information on how your business could benefit to get in touch with our corporate lawyers.
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