UK Treasury funds for innovator firms

Coronavirus support targeted at innovative business structures of the tech sector has been announced today. Existing coronavirus support for businesses required companies to be profitable as of December 2019 to qualify for help so these new announcements make available funding for innovators. Last updated 20/4/2020.

There are two main pots of funding:

  • £750 million of loans and grants for innovative businesses available via Innovate UK;
  • £250 million investment fund for high-growth companies to match private sector investment via British Business Bank

R&D Innovators

The research and development will support 2,500 already supported by Innovate UK and 1,200 companies not currently supported will also be offered cash. Start-ups and businesses driving research and development will be able to access funding. Each company must pass an “innovation assessment” and no details about this are available currently.

Historically, the “innovation assessment” has been proposals scoring above a quality threshold (typically scoring over 70%) where 5 assessors score the level of innovation. The Innovation Assessment (Project) is based on 10 dimensions

A1: Need or Challenge
A2: Approach and innovation
A3: Project team and resources
A4: Market awareness
A5: Outcomes and route to market
A6: Wider impacts
A7: Project management
A8: Project risks
A9: Additionality
A10: Costs and value for money
Other funding from public sector sources
Project finance summary

 

Future Fund matched investing

Convertible loans from the “Future Fund” will be open to innovative companies which are facing financing difficulties due to the Coronavirus.

The Future Fund launches in May 2020 and will be a co-investment fund.

Eligibility:

  • Unlisted UK registered company;
  • Raised >£250,000 in aggregate from private third party investors 5 years; and
  • Substantive economic presence in the UK.

Terms:

  • The Government loan shall constitute no more than 50% of the loan round;
  • The Government loan minimum £125,000 and maximum £5,000,000.
  • Use of funds for working capital only;
  • Automatically convert into equity on  next qualifying funding round at a minimum conversion discount of 20%;
  • A minimum of 8% per annum (non-compounding) interest to be paid on maturity of the loan; and
  • Mature after a maximum of 36 months.

NB: These terms are subject to change.

Companies interested in the Future Fund should engage their existing network of private investors to understand if they would be willing to match financing the Future Fund.

We shall update this page as we learn more.

Firms paying sick pay to employees

Legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force

The repayment mechanism for employers has not been created as yet but will be available as soon as possible we understand.

Business rates support

There is a package of measures to support businesses with premises registered for business rates:

  1. 12-month business rates holiday for all retail, hospitality and leisure businesses in England.
  2. small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.
  3. grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.

Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.

Support for businesses that pay little or no business rates

Additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR). A one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by the government in early April 2020.