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.