Posted by Bharti Moore, Senior Associate
The long awaited financial support for entrepreneur and start-ups
On 20 April 2020, the Chancellor of the Exchequer, Rishi Sunak announced a scheme aimed at providing support to start-up businesses not eligible for existing coronavirus rescue measures, in the form of the Future Fund.
With applications for the scheme now open, it will continue until the end of September 2020 and The Future Fund will be administered by the British Business Bank (BBB).
Further details of the terms of the Future Fund, guidance and supporting FAQs for investors and companies have been released by BBB.
The ICAEW has also put together information on the Future Fund.
The eligibility criteria and headline terms were set out in our earlier blog.
What is the eligibility
There are four key changes or clarifications that we want to highlight and draw to your attention:
1. The applications must be submitted via an online portal on the BBB website.
2. The application process is investor-led, with the lead investor making the application and providing the requisite information via the BBB platform.
3. The terms of the Convertible Loan Agreement are non-negotiable; only certain commercial points may be negotiated. It is a take it or leave it deal and template documents have been published on the BBB website.
4. The Future Fund will be incompatible with the Enterprise Investment Scheme. This may pose to be a big hurdle for many investors.
Once the application process is complete via the BBB platform, it is expected that funds will flow to the company within 14 days.
As part of the process, the company and the investor may each engage a solicitor in connection with the application. If you are a company or investor that requires assistance with the process and advice on the terms please get in touch. Our Corporate team has the legal expertise and professional contacts to help you.
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